Real estate partnerships, when healthy, are a great way to increase the effectiveness of your business, while alleviating some of the pressures of the day to day responsibilities off any one individual in the business. However, they can become a nightmare if the goals and values of the individuals in the partnership aren’t properly aligned (they say a business partnership is like dating somebody, or even sometimes like marriage).
Therefore, before you decide on a long term partnership, not just in real estate but in life, you have to think carefully about who you work with and why. At the very least, you need to make sure you’re on the same page as your partner when it comes to the expectations in five key areas:
- Work Ethic
- Knowledge Base
- Distribution of Profit
5 Important Factors for Finding the Right Person for Your Real Estate Partnerships
1. Honesty: Above all else, be it real estate partnerships or romantic partnerships, you must know that you can trust the people you’re working with. You want to know that there’s full transparency between you and your partner, and that anything they know, you know. You need to know that you can rely on them to work directly with your property sellers or buyers with no concern that they may divulge information that interrupts the integrity of the deal. No true partnership can exist without being built on trust.
Related: 10 Habits for Becoming a Successful Real Estate Investor
2. Work Ethic: A lazy real estate partner isn’t going to do anything but slow you down. You have to know that they’re going to hold down their side of the business. You have to know that they’re going to show up when they say there’s going to and that they’re willing to develop the expertise necessary to compliment yours. If there’s a discrepancy between your levels of dedication to the business, it will inevitably cause issues in the long run, and at times, hard work can even out-do talent and/or intelligence.
3. Intelligence/Knowledge: That being said, you definitely need a partner who is intelligent or at least well informed. There are many aspects of a successful real estate company, and to be effective, you want to have designated responsibilities for you and your partner. Each of you will effectively specialize in their own responsibilities. Education will be a continuous process for both of you, but you need to be sure that your partner will know what they need to know, that they will make the right decisions if/when they have to make them on their own, and that they will not make the same mistake twice. If they are unwilling to make that kind of commitment consistently, again, it will undoubtedly cause issues down the line.
Related: How to Start Learning About Real Estate Investing
4. Fairness/Lack of Greed: As the old saying goes, “Pigs get fat, hogs get slaughtered”. If your partner is greedy, it will affect their views of moral and immoral business practices, and profit-sharing will inevitably become an issue between the two of you. At the end of the day, you have to know your partner is a team player.
5. Ambition: If you’re trying to build an empire and your partner is just trying to make some side money, there are going to be some discrepancies in the amount of time and sweat you’re each willing to put in. This is bound to cause disagreements and will undoubtedly slow the wheels of your business.
To learn more about real estate partnerships, read What You Need to Know about Real Estate Partnerships.
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These are not all of the aspects that need to be considered when choosing a business partner for your real estate partnerships, but they are very important and should get you pointed in the right direction. For more information on how to get your real estate investment business off the ground and beyond, please check out my new book The Get Rich Scheme: The Secrets to Making Fast Real Estate Cash in Any Economy at the link below! FREE the week after Black Friday and Cyber Monday (11/26/2018-11/30/2018) on Amazon!
This article has been contributed by Simon George.