A real estate career is challenging. However, one of the biggest decisions you have to make is whether you need a partner or not. Some investors prefer not to partner with someone right away. Meanwhile, there are also handfuls that prefer starting with a wingman on their very first deal.
To help you decide what suits your career, here are some points to consider:
Why You Should Not Take on a Partner
Your first investment is crucial. This will boost your confidence as an investor and you may want to have full control over your financial decisions.
Still, this doesn’t apply to all since some investors find success with someone helping them out along the way.
The biggest problem with having a partner is that you would have to pay them back if you fail. But if you’re on your own, you wouldn’t have to think of anything else than your own results.
Also, it’s not ideal to get a partner just because someone pressures you to do so. Always consider what you prefer on your investments as well as your personality toward work.
What To Consider About a Partnership
If you’re thinking about getting a partner, it pays to consider the following aspects first:
*The knowledge you lack
The reason why real estate investors look for a partner is to fill in their knowledge gap. No one knows everything about real estate. If you’re not yet sure what to do, you can partner with an investor that you trust.
On the other hand, you should consider the possibility that the knowledge you lack can be obtained through training.
*You’re looking for a deal that could save you
If your previous investments didn’t yield the best results, you can look for a partner to give you a deal to boost your capital. If you opt for this setup, always write everything on paper. So should any disagreement arise, you will have a strong case to serve.
Always make clear contracts, agreements, and deals. Proper paperwork can save your friendship, time, money, and relationship with other people.
*Consider the risk you’re taking
Are you the “money person” or the “brain person”? If you’re the money person, you have to be cautious when partnering with another investor.
Always ask for guarantees to ensure that your money is 100% secured should anything comes up. Look for a seasoned investor who has a solid track record.
*What you want to gain with the partnership
Always clarify this before signing up with a partner. Do you need more capital? Are you looking for someone who can contribute their expertise? It’s best to know what you’ll gain when you enter a partnership.
By clarifying this part, you’ll minimize the risk and fears of where the partnership will go.
*Familiarize yourself with your potential partner
If you have a prospect partner, make sure that you know the person for at least a year. Know how he works and what he does to grow a certain capital.
Always check the personality of the person and if you think he or she will get along with you well. Even the nitty-gritty details can make a difference.
Characteristics of a good real estate partner
If you’re sure that you need a partner, make sure that you look for the following characteristics:
*Openness to communication
The success of your partnership depends on how well you and your partner communicate with each other. Make sure that the investor you’re going to deal with is on the same page with you.
*Someone who has a vision
All of your plans won’t take flight if your partner isn’t willing to move forward. You may want a visionary partner who always aims to make the most out of every deal. Real estate is a cut-throat business and you would want someone who will work with you along the way.
A partner who’s known for his honesty and straightforward attitude is for keeps. This is true, especially if you’re the one supplying the larger chunk of the capital.
Always aim to develop mutual trust between you and your partner. This way, the partnership will last long and both of you will see multiple deals.
*Someone who supports
You and your partner should have each other’s back come hell or high waters. Also, the fact that you support each other will inspire you more to extend the partnership. How can you achieve this? Look for a partner that shares the same vision, objectives, and values.
Remember, it’s not a requirement to look for a partner right away. Always consider the mentioned factors before inking a deal with someone else.