Learn How To Start Investing In Real Estate
Learn How To Start Investing In Real Estate

6 Key Benefits of Partnering Up in Real Estate

Written by JD Esajian

If you’ve been at the real estate investing game for any period of time, at some point you’ll probably consider bringing on a real estate partner. And though it can be scary, especially at first, working with another investor – who may have very different working styles or personality traits — partnering up in real estate can offer a myriad of advantages and benefits to your overall career.

But what kinds of benefit exactly when starting a business with a partner? Do the benefits of working with a business partner outweigh the risk? And how can partnering up in real estate get you that much closer to your financial goals?

No matter where you are on the real estate investor continuum, here are six key benefits to entering into a business partner agreement, and how it might just be what you need to reach the biggest breakthroughs of your career.

Advantages of Partnering Up in Real Estate

How to find a business partner

1. Combining resources

Starting any new business venture, and that includes a real estate investing business, can sometimes require more capital than readily available. If you’re a new investor who finds the initial start-up costs a bit higher than your budget allows, or you’re looking to branch off into a different sector of investing — and lack the present capital to launch your venture — then bringing on a partner might be the first item on your real estate business development 101 list.

Not only can pairing up with somebody who has similar investment goals as yourself bring in a much-needed initial capital contribution to get your business off the ground, but it can also make securing financing much, much easier. (Not to mention make real estate money partners more accessible.)

But perhaps the biggest financial advantage to learning how to find a business partner is the ability to split the risk monetarily. (Many business ventures become a lot more palatable when the risk is spread equally.)

2. Expanded investor network

It’s hard to over-state how important real estate networking is to success of an investor. And by joining forces with another real estate investor your pool of potential lenders, homebuyers, wholesalers, contractors, agents, and lawyers becomes exponetially bigger.

Now, it’s helpful if all partners bring a (somewhat) equal-sized network to the table; it can be frustrating if one partner brings a full Rolodex of contacts to a partnership, while the other partner leeches off those hard-earned connections.

As long as all parties bring a relatively equivalent investor network to the partnership, then this expanded set of contacts can become one of the most powerful parts of a real estate partnership.

3. Balance

Every entrepreneur brings a different set of strengths and weaknesses to a partnership, no matter how many hours they spend working or productivity books they read.

Perhaps you’re more of a sales/marketing person and your would-be partner is great at metrics and loves to pore over excel sheets to find incremental boosts in ROI.

And your goal should be to find a business partner who doesn’t simply mirror your personality, but fills in an area of weakness, you’ll ensure the partnership (and the business) is healthy and primed for future success.

4. Divide and Conquer

Despite our tendency, as entrepreneurs, to try to squeeze 28 hours into a single day, we’ve only got so much time to perform the tasks that move our real estate investing business forward. (This is especially true, in the beginning of our career, when we’re trying to “learn as we go.”)

By bringing a partner on board you’ll be able to delegate and portion out many of the time-consuming (though important) tasks required. (Hopefully you’ve removed or outsourced the non-essential stuff.)

This doesn’t mean the workload will always be split equally down the middle every week. Who does what in a partnership will often rely on a partner’s strength, rather than their calendar. But with frequent conversation and proper real estate business partner structuring you can often get 2-4 times more done in your business than you ever could on your own.

5. A Second Set of Eyes

Doesn’t matter whether it’s a piece of sales copy or a logo design, everything is improved by having a second set of eyes look at something. This is especially true in the deal evaluation field, where a property needs to be analyzed (quickly) and decisions made fast enough to take advantage of the opportunity.

By having two (or more) partners sift through the information of a potential deal you’ll be able to tap into someone else’s experience and knowledge and make a much more informed acquisition decision. (Not to mention possibly save yourself a lot of financial headaches in the process.)

6. Motivation and Accountability

Perhaps the most valuable benefit to a real estate partnership is the accountability that comes from knowing someone else is depending on you. That it isn’t just you that suffers when you don’t put up that batch of bandit signs or post another listing to that Facebook Group. (The fear of letting another person down can be extremely motivating.)

But it isn’t just negative reinforcement that a partnership can provide. When things are looking bleak and less than ideal, having a partner to bounce ideas off (or for a bit of “investor therapy”) can be quite beneficial and help you survive the marathon that is an investing career.

Building the Perfect Investor

Contrary to popular belief you are not Superman (or woman). Even the most accomplished real estate investor realizes that they aren’t amazing at everything, and that the key to success is to do more of what you do well, and let someone else do more of what they do well.

By partnering up in real estate with the right investor by your side, you might just find your business has more production, leads, deals and profits than you ever imagined possible.