A friend once told me, “All partnerships are sinking ships.” You can tell he’d been burned once or twice. But his sentiment has some truth in it. You have to be very careful about who you choose to partner with.
Not all real estate partnerships work out. You can’t go into a partnership blind. For example, don’t offer up your life savings, go home and expect checks in your mailbox. You must know what you are doing before any money is exchanged.
Prosperous real estate partnerships take work, time and sincere effort. Be thoughtful about who you partner with. Take the time to get to know the weaknesses and strengths of your partner. It will be worth your time. Successful real estate partnerships offer many advantages.
You merge superpowers
Like Superman and kryptonite, everyone has a weakness. You know it, you avoid it, and occasionally you try to improve upon it. The best business partner would be someone who supplements your weak points with strengths. Perhaps your strength is running the numbers but the idea of negotiating makes you want to hide. Find negotiating champions you might want to partner up with.
Identifying your weaknesses and strengths will also help you define roles in the partnership. Expectations and goals should be set at the beginning. Do so in writing, so everyone is crystal clear on what needs to be done, by whom and when. Accountability and transparency are your watchwords.
You double your resources
When you partner up with like-minded individuals in real estate you can grow your own network of professionals. Building a solid team of brokers, contractors, legal talent, lenders, buyers and more is one of the most powerful, efficient ways to grow your business.
Take advantage of the horizon expansion to make sure everyone knows what you stand for as well. We can all benefit from collaboration.
Deeper pockets
The financial aspect of real estate investing is a stumbling block for some real estate investors. With a partner you expand your sources of financing and capital. The right partner can help increase the amount of capital going into a deal as well as doubling your borrowing ability.
Of course, there is always fine print to be written when it comes to money and real estate partnerships. There are many different kinds of partnerships. How a partnership is structured, the amount of money invested and the risk involved are just some issues to consider when signing someone on.
Make sure all the details are spelled out in contracts first. This will save you sleepless nights of worry.
Use common sense
Good partnerships are similar to other healthy relationships in your life. Make sure you have shared values and goals. Be authentically you, not your internet persona. Communicate daily on progress. Respect the other individual for who they are, not who you want them to become. Focus on the big picture and don’t forget to laugh.
Learn more:
When Do You Really Need an Investment Partner?
5 Reasons You Need the Best People on Your Team
Raising Money for Your Real Estate Deals
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