A close reading of Grant Cardone's own fund documents suggests his management fees may be far bigger than they look, which is bad news for his investors.

• His documents say the 1% annual fee is charged on a property's full purchase price, not on the cash investors actually put in.
• With about 65% of a deal borrowed from a bank, that 1% on the purchase price works out closer to 3% on investor money.
• The fee only shrinks when a property is sold, and appears to deliberately leave out refinancing.
• So after a refinance hands cash back to investors, the fee can keep running on the original purchase price even though investors have far less money left in the deal.
• The fees are deferred rather than collected now, so nobody has yet seen how much he ultimately expects to take.

Outlook: Expect more scrutiny of how these fees are disclosed, and pressure on Cardone to spell out the real cost to investors.