Partnerships in real estate investing are a great way to reach goals that may be otherwise unattainable on your own.
Benefits of Having a Partner
One great benefit of having a partner is that the two of you can compliment each other. Let's say you're good at working the numbers, but your ability to find the perfect properties is not your area of expertise; if you partner up with someone who can find a needle in a haystack, the two of you can do great things. Many people would like to get into real estate investing, but they do not have the time or understanding to make it happen. When you possess the know how, you have a skill that people will pay good money for, so you should never discredit this skill. It can help you earn a great amount of money, if you find someone with money who is ready to invest. It is just like an entrepreneur with a profitable start up looking for the right accountant or attorney. They are willing to pay for that persons knowledge and make them a large sum of money in the end too. They both benefit from the relationship. The attorney or accountant helps the entrepreneur protect, manage, and grow their money. I'd say that is a win-win situation. This can be extremely helpful if you are just starting out and still unsure about a lot of things or just insecure right now.
Finding the Right Partner
Finding a compatible partner may take some time. As individuals, we all have our own ways of doing certain things, and sometimes people just aren't compatible no matter how hard they try. In your search, you want to find someone who has experience in real estate investing or the ability to finance or fund the deals. You want to make sure that they have the same goals and work ethics as yourself. Someone who is not as dedicated will not only hinder your success or reduce profits on certain deals, but it might even give you a bad name in the business through association.
On the other side of the table, you must be able to match what you are expecting. In other words, if you are requesting that your partner have good credit, you should come to the table with something equal in value, such as good negotiating skills or great sources of finding distressed properties.
You want to be up front with them, just as you would like the same honesty. If you are inexperienced, or you have credit issues, let them know up front. As I mentioned before about complimenting each other, perhaps you have something that they don't have, which you can bargain with, like your great communication skills and their great management skills. You close the deals and they manage the paperwork.
One of the biggest mistakes people in general make when deciding to partner with someone is they do not take the time to see if they are a good fit. If this were a personal relationship, you both could walk away and delete each others' numbers from your cells phones immediately, but if you have time and money invested, what do you do then? You should always have a plan clearly outlined that defines every aspect of what you are working toward and who is going to be inbolved in what decisions. I recommnmend that you even determine what the resolution is going to be if you decide to dissolve the partnership in the end. A partnership agreement is exactly what you need to put into place here. You are making sure tht you know exactly what is expected of you and your partner knows what is expected of them and it is in writing. Therefore, if there is a problem, you have a protocol for dealing with it and there is no denying each parties duties and responsibilities. Essentially, it keeps honest people honest.
Also, you should make sure you are not promising to do more than you can or are willing to do. People will respect your honesty, however, they will feel betrayed if you do not do what you say you are going to do. If you choose your partners carefully and you can work together as a team, you can easily build credibility and start bringing in some great profit.
If you would like the chance to work with me or one of my fellow real estate investor coaches and our advanced training programs, give us a call anytime to see if Dean's Real Estate Success Academy and our customized curriculum is a fit for you. Call us at 1-877-219-1474 ext. 125