Promises and Returns: When the Numbers Don’t Tell the Whole Story

Daniel phoned me early one morning.

Not a question. Not a request for advice. One ring, and then a sentence: “I think I’ve made a big mistake.”

I’d known Daniel for several years. An experienced businessman, not naive, not the type to be easily swept away by nice presentations. He had done a few real-estate deals in Israel, understood balance sheets, knew how to read a contract. But about eight months earlier he had made a new decision – to expand abroad.

His choice fell on Romania. Bucharest, to be precise. A growing country, a developing real-estate market, high demand for rentals. The marketer, an Israeli company with a glossy website and plenty of testimonials, painted him a tempting picture. “These numbers,” the salesman explained in a glittering office in Tel Aviv, “that’s not what you get in Tel Aviv, right?”

Not right. But more on that in a moment.

Daniel bought a two-room apartment in a fairly central area. The deal was completed, the contract signed, and to manage the property properly, and to get a certain degree of legal and tax protection, a Romanian company was set up in his name and under his ownership. “Everyone does it,” the marketer explained. “It’s the standard. Otherwise you’ll have a problem registering the apartment in your name in the Romanian land register, because you’re not a Romanian citizen.”

The first months passed quietly. The tenant paid, the money arrived, and Daniel felt he was on the right track.

And then came the first quarter, with a report from the Romanian accountant.

He sat across from me with the printed sheet in his hand. “Explain to me what I’m missing.”

I went through the figures. There was nothing to explain – the numbers spoke for themselves, and they told a completely different story from the one he had heard at the sales meeting.

The first problem: the promised return was gross. Truly gross – before everything. Before property management, before maintenance, before insurance, before the building’s service charges, before empty periods, before local taxes on rental income. When you factor all of these in, what is actually left is far smaller than what was shown, even on a good day.

The second problem was a bigger surprise. The company set up to own the property – the very legal entity meant to “protect” him – comes with fixed costs: bookkeeping fees, filing annual reports with the Romanian authorities, a local accountant’s fees, and sometimes government charges that arrive at the least expected moments. Nobody spelled this out for him in advance. Not in the presentation, not in the contract, not in the enthusiastic phone call he got the day after he signed.

“Why didn’t you ask me first?” I asked him.

He looked at me for a moment. “Because I didn’t know what to ask.”

That’s the heart of the story. Not a lying marketer, not a fraudulent contract, not a criminal deal. Simply missing information, questions that weren’t asked, and one small term that fell through the cracks: gross.

A gross figure isn't your money. It's the starting point of a calculation you haven't done yet.

And the company set up in your name? It isn’t invisible. It has running costs of its own, even when it does nothing.

What came out of that meeting wasn’t a disaster. Daniel’s deal didn’t collapse – it’s simply less good than he expected. He’ll come out of it perfectly fine. But he’ll come out of it wiser than he went in.

And I came out of it with a reminder I get afresh every few months:

The number you’re shown is always the starting point, not the result. My job is to help you get to the result – before you sign, not after.

When a client comes to me with a “ready” deal and asks me to “just check the contract”, the first question I ask isn’t a legal one. It’s financial: what exactly does this return include, and what doesn’t it include?

Sometimes one question is worth more than any clause in the contract.