Real estate investing is a great way to make money. However, the responsibility can be daunting depending on the prospective project. At times, an entrepreneur will wonder if they should get a partner. This is a tough question to answer, and its actually something you’ll have to decide on your own. Here are a few tips that can give you an idea of what you should do.
Realize that partnering up can be very risky, even if you’ve known the person for years and years. They say you never truly know someone until you go into business with them. If you decide to partner with a friend, realize that personal issues must be left at the door. Do some internal searching. Why exactly is it that you want this specific person as a partner in this venture. You should be able to come up with a few good reasons of how it would benefit the project. If you can’t, you should probably fly solo on this one. Do not get a partner simply for the convenience of it. Resentment can grow in these types of relationships.
On the other hand, partnering up can definitely have its plus sides. Say you find an opportunity that you know will be a great investment, but can’t afford it on your own. You should definitely consider getting a partner. Never pass up an opportunity because you’re scared to partner up. Most investors don’t have the funds to buy and close a deal on their own. This is a reason you should definitely be networking as often as you can. There are plenty of properties out there, but not enough people to invest in them. You need to get out there and meet as many people as you can.
Another reason to get a real estate investing partner is in regards to skill. One person simply doesn’t know everything. Two minds are better than one, they say. You both will be skilled in different areas, which will positively bring different things to the table. Whatever you lack, the other person makes up for, and visa versa. This is also how you learn and grow in the business. You can’t excel without experience.
The number one thing you need to do is have a legal document drawn up, called a written partnership agreement. This agreement is set in place to protect both of you in case something goes wrong. What if your partner doesn’t hold up his end? You cannot go off of a verbal agreement in court. You have to way to get out of the deal if you need to.