The Real Estate Detail
That Could Derail Your Business Sale

William and the Portus team have been working with a business owner in the housing services market here in Charlotte who is likely heading toward a sale somewhere in the next six to 18 months. The new construction market has been slow, revenue hasn’t fully recovered to its 2023 and 2024 levels, and the timing isn’t quite right yet. But the preparation has been underway for a year and a half.

That preparation includes quarterly check-in calls with an M&A firm the Portus team helped identify after interviewing several options. Personality matters as much as credentials when it comes to finding the right M&A fit, and they are confident they landed on the right one. Those quarterly calls have been valuable, helping guide the business owner through the things that need to be improved, addressed, and checked off before going to market.

And then during one of those calls, something jumped off the page.

The Question That Changed the Conversation

Do you own the underlying real estate at each of your locations?

Of course. Four, maybe five locations, each property held in its own LLC, all structured correctly. The Portus team had already done the work to make sure the business entities and the real estate entities were set up properly. Everything looked right.

But the moment that answer landed, a new set of questions opened up immediately. If the business owner owns both the business and the real estate it operates out of, those two things have to align before going to market. And making sure they align means asking some very specific questions.

Are the rental agreements in place between the business and the real estate LLCs? Is market rent being charged? Are the terms and conditions of those agreements correct and current? Because a buyer coming in for due diligence is absolutely going to ask who owns the property, what the lease terms look like, and what it means for the deal structure if the seller owns both sides of the equation.

Why It Matters in Due Diligence

Buyers at this level have seen this situation before. When they discover that the business owner also owns the real estate the business sits on, it raises questions. Not necessarily deal-breaking ones, but questions that need clear and well-documented answers. If those answers aren’t ready, it creates friction at exactly the wrong moment in the process.

Finding that detail now, before going to market, is the right time to find it. Finding it during active due diligence with a buyer at the table is not. It introduces uncertainty, slows momentum, and can affect the final number.

The Broader Lesson

William closes with a reminder that extends beyond real estate. When you are preparing to go to market, the job of your advisory team, your M&A firm, your financial advisor, your attorney, is to surface these things before a buyer does. Every detail that gets uncovered and addressed in advance is one less point of leverage a buyer has during negotiation.

If you own the real estate your business operates out of, add it to the list. Get the rental agreements reviewed, confirm market rent is being charged, and make sure everything is documented and aligned before the sale process begins.

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 ​[00:00:00] So we’ve got a client who is likely to sell their business in the next, I don’t know, maybe six to 18 months. Business is in the housing services market, and here in Charlotte, the new housing market, new build, new construction, if you will, is still a little slow. And so revenue hasn’t reached back to where it was in 2023, 2024.

So I don’t know, about a year and a half, two years ago, we started interviewing different M&A firms, trying to find the right fit for the, for the seller, for our client. Personality matters so much, so we really had lots of different conversations and, and we think we’ve settled in on the right M&A firm.

And in that process, one of the things we do is a, a quarterly check-in with the M&A firm, and that’s been helpful as [00:01:00] we’ve guided the business owner through things they can do to improve the business, right? Uh, have it function better, be more attractive, be more profitable, um, check all the different boxes that the buyer is eventually gonna come in and start circling through.

So naturally, we had one of these calls last week, and as we’re going through the phone call, we’re going through some new things, different topics that are relevant to the business, business owner, catching up on what they’ve done, how they’ve worked, et cetera. And as we’re going through the phone call, you know, one of the natural conversations was Wait a second.

A no-brainer right here. You own the underlying real estate in each one of your businesses, don’t you? And the natural answer, ’cause we knew it, the natural answer for the business owner was, “Of course.” Uh, they own four, uh, maybe five different locations, and each location they own the underlying property in, um, each property is owned as in, in its own [00:02:00] different LLC.

We’ve gone through that work with them to make sure that the business is set up correctly, the LLCs are set up correctly, like the entire structure is done right. But all of a sudden it just kinda jumped off the page. Well, wait a second. If you own the real estate and you own the business, we’ve gotta make sure those two things align.

And so we need to step back in and have the rental agreements reviewed, make sure that we’re charging market rent, make sure that the terms and conditions are right, make sure all of those different things are right because it’s inevitably something gonna be or is, it’s inevitably, inevitably gonna be something that comes up in that due diligence process.

They’re gonna wanna know who owns it. Um, they’re gonna want to know what the terms are. If they find out it’s owner- the business owner owns it as well, it’s gonna raise some additional questions and concerns, et cetera. So anyways, uncovering that earlier on in the due diligence process prior to actually sitting [00:03:00] down, going to market, and certainly prior to getting into the weeds of the due diligence process with the future buyer is the absolute right time to uncover things like this.

So remember, when you’re going to market, having conversations with the M&A folks, having conversations with your team that you’ve put together to make sure that the business and all the things that support it are structured in a way to make the deal the best it can possibly be is something you’ve gotta take care of.

So, um, remember, check the box real estate if owned gets reviewed as part prior to going to market​. 

ORIGINAL MEDIA SOURCE(S):

William Bissett: The Real Estate Detail That Could Derail Your Business Sale | Portus Perspectives

Originally Recorded on June 2, 2026

Portus Perspectives: Episode 20

By /Published On: June 15, 2026/