There are several ways and many different strategies to make money in real estate. Essentially, there is an exit strategy for anyone who entertains the prospect of investing in real estate. What doesn’t work for someone may work for someone else. However, one of the most important strategies you can consider pertains to individual partnerships. Whether or not you want to work with a partner, the right fit can mean different things to different people. Having a conducive business partnership in the real estate industry may create a very successful atmosphere. Sometimes, it may be all you need to take your business to the next level.
There are many benefits to working with a partner, as long as each of you brings something to the table. This could range from experience, contacts, financing or even negotiation skills. If you both have access to private money and have established local relationships, there may not be a real benefit to either of you in partnering up. You want your partner to fill in the voids of your business where you are currently weak or lacking. If either one of you doesn’t see what the other person brings to the table, the relationship will not be very strong and will quickly dissipate.
Like most any relationships, a little arguing can be good. If you are set in your ways or only have done things one way, it will be constructive to see things from another angle. If your prospective partner and you share the same strategy, you may not be able to spot issues that can arise down the road. You may not like it when they suggest you pass on a property, but if they can justify why, your business will be stronger for it.
You don’t have to have the same strategy for each property, but you do need to be after the same goals. If you find out five months after you purchase a property that your partner wants to sell when you wanted to rent, you have a problem. Things always change with a portfolio constantly, but you need to have a shared idea for how you want things to go and in the time frame you want them. Before you look at an individual property, everything should be sorted out and discussed. In addition, you need to be able to have awkward conversations about money, time commitments and delegation of tasks. You don’t want to be figuring money out after the property has closed. The more you can discuss before you start, the stronger and better defined your partnership will be.
Working with the right partner can either bring your business to another level or stop it dead in its tracks. Too many partnerships are formed for the wrong reasons or without the proper discussion that is needed. Between local networking clubs and investment meetings, you should be exposed to enough fellow investors that you can form a partnership that you feel comfortable with. If you can find the right working partner, your business can take off and never look back.