When Do You Really Need an Investment Partner?

It sounds impressive to tell someone, “Everything looks good, but I want to discuss this with my investment partner before we move forward.” Beyond making your investment company sound a bit larger, there are some real benefits to having a collaborator.

There are times when it makes sense to partner with someone, and there are other times when it brings more aggravation than it is worth and can damage friendships.

When an investment partner makes sense

 
There may be times when you find a great deal but do not have enough cash available to buy it on your own. Perhaps you do not want to extend yourself further financially or take on a lot more debt at that time. If the only way you can make the transaction happen is with the additional resources of a partner, it makes sense to take this route.

Work-life balance

 
Having a partner can free up another valuable commodity that you have in limited supply: time. Real estate investing is demanding, and novice investors can quickly become swamped. Being rich with money is great, but if you spend all your time earning it, you discover that being money rich and time poor is more stressful than satisfying. A partner can help you maintain a proper work-life balance by sharing some of the duties and responsibilities.

A partner may also bring something to the deal that you lack. If you are a creative person, you most likely need someone logical and detail-oriented. Novice investors can benefit from a partner with some established connections. However, for a true partnership, there must be balance in the equation. They can’t feel as though they are carrying you and must appreciate your strengths and contributions to the partnership.

A partnership can become a sinking ship

 
Working with an investment partner is something you should be very careful about. Do not feel obligated just because someone is a friend who wants to make some extra money. Each person must know what is expected of them upfront. Both parties should have the same level of commitment to the real estate deal. In addition to knowing their strengths, you should also be aware of their weaknesses and how they handle difficult situations.

If you do not really need a partner, there is no reason to get one. It is much easier to decline partnering with someone than it is to deal with the aftermath of a partnership gone wrong.

Be smart about who you choose to partner with and only do it if it will benefit the real estate investment you are making.

Related Articles

 
How to Split a Real Estate Deal With Your Partners

30 Ways to Invest in Real Estate Without Using Your Own Money

Raising Money for Your Real Estate Deals

The following two tabs change content below.
Avatar
Theresa Bradley-Banta writes about investing in real estate while avoiding the pitfalls that plague many new investors. She is a 2017 PropTech Top 100 Influencer and winner of 14 American and International real estate awards for her website and real estate investing programs. As featured on: The Equifax Finance Blog, AOL’s Daily Finance, Scotsman Guide, The Best Real Estate Investing Advice Ever Show, Stevie Awards Blog, Rental Housing Journal, and Investors Beat among others.

You'll Love This.

Get our free download & educational emails right to your inbox.

 

If you change your mind, you can unsubscribe any time in the footer of our email messages. See how we respect your privacy.

You have Successfully Subscribed!