Partnering with someone else to launch yourself into real estate investing or take your business to the next level may seem essential but could it also be the fast track to failure?
If only you had another $10,000 you could do more marketing, another $100,000 you could take down some better deals or hire a bunch of people to help you, right? The problem is partners aren’t free, in fact they can be very expensive. Isn’t it better just to go it alone at a slightly slower pace and avoid the risk?
Before you decide to jump in or run from a real estate investing partnership consider why business partnerships most commonly fall apart, weigh the pros and cons and ask yourself if you can protect yourself from the downside sufficiently.
The most common reasons business relationships fall apart are one side getting too greedy, personality conflicts, disputes over the direction things should be going in and parties deciding they just want to do something different.
You should never choose a real estate investing partner just for the money. If is it just about the money have them make a loan, not become a full time partner. If it is about more than that, vet them very carefully. What else can they do for you and your business? Do they have the knowledge you don’t and can act as a mentor? Do they have connections you need? Are your values and goals in alignment?
Partners can be invaluable and help you to rocket your real estate investing to new highs quickly and further than you could alone but you must protect yourself for when things don’t go as planned. Have a written agreement, be clear about each person’s responsibilities and obligations, decide who is calling the shots on a daily basis and have a structure for exiting the partnership.
A partner can help you to get the jump start you need, take advantage of time sensitive opportunities and grow your real estate investing empire faster. However, even the best relationships have their issues and when things don’t go well, they get ugly very fast. So before you blow up or suggest a split talk to an attorney and make sure you are protected or you could lose a lot more than you gained a lot faster than you think.