Some of the best moments you can have in business are those that are shared with your friends and family. Conversely, some of the worst times are when deals go wrong and you stand to lose those that you are closest with. Like anything else in business, there is a risk and reward for everything you do. If you want to partner with a spouse, friend or family member, you have to understand that for every high of closing a deal or working together there may be an equal low. If you cannot accept that this is a possibility, you should look for someone else to work with. Working with friends and family needs to be carefully considered from every angle.
Most partnerships in the real estate world are thrown together out of necessity and convenience. One partnership may be the result of someone with money to invest, but isn’t handy enough to conduct their own rehab. However, these partnerships often end in disaster. There is nothing wrong with finding someone that could do what you can’t; but before you commit, you need to talk about goals, aspirations, expectations and most important finances. These are things that need to be discussed before a partnership is formed.
There is one five letter word that gets in the way of more relationships than anything else — MONEY. Regardless of how close you are with someone, if you don’t feel you are getting a fair amount back or feel you are putting too much at risk, the relationship will start to erode. The simple solution is to put everything on the table before you start. Talk about the worst case scenario for the deal you are working on. Come up with a list of expectations as far as work and time commitment. You never want to make a decision as the deal is going on or once you get started. If you map out as much as you can before you make an offer, things will go much smoother when it is time to get started on your project.
Dealing with a friend or family member that you see often can be a tricky thing if you let it be. It is difficult to separate business from friendship, but you have to try to leave the two separate. If you have a disagreement on a property or on strategy, discuss it like friends or family would, but when you are done let it go. One of the reasons you want to work with these people to begin with is because you feel like you know and trust them. You should have a pretty good idea of what their strategies and thoughts will be on a property or with the business before you get started. There is nothing wrong with taking it one deal at a time until you are both comfortable with each other. If you have different thoughts on the business as time goes on, you can go your separate ways without damaging the relationship.
Working with a partner can help grow your business faster than you could have imagined. Finding the right partner shouldn’t be something that happens over a lunch or a few beers. Take your time and make sure you are both on the same page before you move forward with anything. Working with people that are close to you can make every day much more enjoyable, but it can also make your life miserable if you are not careful.