How To ‘Survive and Thrive’ With a Real Estate Partnership

How To ‘Survive and Thrive’ With a Real Estate Partnership

4 min read
Chris Clothier

Chris Clothier began building his rental portfolio in 2003 as a successful entrepreneur looking to diversify his investments. He quickly gravitated toward passive investing, establishing a portfolio of over 50 single family homes in Memphis, Tenn. As an original client of his family’s firm Memphis Invest (now REI Nation), Chris experienced firsthand what a passive investor endures when purchasing out of state. In 2007, Chris moved his company and family back to Tennessee, wound down his brokering company, and joined REI Nation as a partner and director of sales and marketing.

Experience
Since joining REI Nation, the business has grown into the premier turnkey investment company in the country and a standard bearer for best practices in the industry, managing over 6,000 investment properties for 2,000 passive clients. In addition to managing the development and implementation of sales and marketing processes, Chris serves as an ambassador for the company, working with the team to help potential investors define their purpose for investing in real estate and educating peer companies on best practices.

REI Nation clients’ portfolios hold a value of close to $800 million in single family assets in seven cities. The company has been featured as a six-straight year honoree in Inc. magazine’s list of the 500/5,000 “Fastest Growing Companies in America.”

In 2019, Chris’ team assisted 600 investors with purchasing just under 1,000 fully-renovated and occupied turnkey homes. Chris led the re-brand of his family’s company on January 1, 2020, from Memphis Invest to REI Nation.

Chris is also an experienced real estate speaker and addresses small and large audiences of real estate investors and business professionals nationwide several times each year, including IMN single family conferences, the PM Grow property management conference, and the Ignite conference in Las Vegas each December.

Chris continues to hold a sizable single-family rental portfolio in both Tennessee and Texas. Along with his family, he owns several commercial buildings in the greater Memphis area.

When not working with the team at REI Nation, Chris is busy raising five kids, operating a racing company in Memphis, and serving as CEO for The Cancer Kickers Soccer Club, a Memphis-based 501c3 providing comfort and care for kids battling childhood cancers.

Founded in 2017 by Chris and Michelle Clothier, the non-profit organization focuses on providing a team environment for kids to find encouragement and strength in their battle. The company worked with over 500 children from six countries in 2019.

Press
Chris has been featured in stories published in Money Magazine, The New York Times, The Wall Street Journal, and DN News, as well as the Memphis Business Journal. In 2018, McGraw-Hill Publishing purchased Chris’ manuscript, The Turnkey Revolution, and worked with Chris to publish his first book in May 2018.

Chris also publishes two weekly blogs at ChrisClothier.com and REINation.com. Chris has also published articles on the BiggerPockets Blog since 2009.

Follow
REINation.com
ChrisClothier.com

Read More

Join for free and get unlimited access, free digital downloads, and tools to analyze real estate.

What are partnerships?  Have you ever thought about what it really means to have a partnership and what does it mean in the real estate business?  I can tell you that partnerships can be both hard and easy and sometimes in the same day!  While there are many different ways to make money in real estate and structure partnerships around each, I am going to focus on partnerships within your business.  The business of being a professional in the real estate investment sales world.  For starters, I’ll give you the quick text-book definition of a partnership:

Partnership –  An arrangement by where parties agree to work together to advance their mutual interests.

That is a pretty formal way of saying I agree to do my part if you agree to do your part.  And…there is where the problem exists in most partnerships.  The word “IF” is involved!  It is a funny little two letter word that is responsible for the down fall of more partnerships than any other cause .  Of course, I don’t have the scientific data to prove this, I am just making an educated guess from having been involved in a few!  I’ll never forget one piece of advice I received from a mentor a few years back.  We were talking about the future and where I saw myself in 5, 10 and even 20 years and he made a statement of fact so concrete he didn’t even try to qualify it:

“All Partnerships End.  You Get To Choose If They End Good Or Bad!”

For a guy who is in a partnership with his brother and dad that was shock to hear.  Especially with how casually and matter-of-fact that he put it.  But my mentor was no dummy and he had been through several business cycles including successful and failed business partnerships so he knew what he was talking about.  He also knew my brother and father very well so he was not just talking blindly.  He was really trying to help and his advice still serves us well to this day.  If you are going to form a partnership, do it right.  Do it well. Be respectful and always prepare for what is next.

What Makes A Great Partnership in Real Estate

First and foremost, any great partnership can thrive if the parties involved give each other the room they need to operate.  Partnerships exist so that each person is able to concentrate on their strengths and hopefully the partner is able to concentrate on your weakness.  A really well thought out partnership will come together because each party brings something to the relationship that their partner needs.  If that is the case, then the only way for a partnership to work is to get out of each other’s way and let everyone do what they do best.  So partners have to be mindful of what they do well and what they do not do well and be willing to admit it.  Failing to admit weaknesses and then bringing in a partner only to tell them how to do their part will be a deal killer…quick!

Communication in a Partnership

What do You Bring to the Table?

The third component of a great partnership is to hold yourself accountable for your expertise or the talent that you bring to the partnership.  Going back to the definition, you have to remember that the point of the partnership is so that everyone thrives.  A mutually beneficial partnership means that everyone is acting in a manner that lifts the whole company up.  Each partner is working hard and doing their piece to be successful.  Again, it may sound almost basic, but too often, partnerships are formed as a crutch.  They are formed as a way for one partner to leverage the work of others so that they can do less!  I’m quite sure we have all seen this and know it to be true.

Nash Equilibrium

Lastly, when talking about partnerships, especially when formed to build or grow a company, I am always reminded of the movie “A Beautiful Mind” and the game theory called a Nash Equilibrium.  Simply put, it states that any two people are in a Nash Equilibrium when they are making the best possible decisions they can based on their belief that everyone else involved is also making the best decisions possible.  No one should enter into a partnership to go backwards.  We only enter partnerships to improve our own position in life whether it be financial independence or to gain control over our time, etc.  Why else would we enter into a partnership?  So, consider a partnership like playing a game.  A game that each of us individually wants to win.  When we enter into a Nash Equilibrium, then we are all trying to win individually, but we only make decisions based on the belief that everyone else is trying to win as well.  When this is done in concert, no one makes a decision that is not good for the group.  In essence, we all win!  Is that not the purpose of forming a partnership in the first place?

Summary

To recap, great partnerships exist because we all have particular talents and we all have skills that need improvement   The quickest way to improve our talents is to focus on our strengths and surround ourselves with others who are stronger in the skills that we need to improve.  That is a great partnership.  After it is formed, we need to always be mindful of what we bring to the partnership and make sure we bring it full force every day!  Then we need to have very clear and open communication including taking time to get away from the company and meet as partners to discuss issues in a different environment.  This allows for open and honest communication.  Finally, we need to remember that the partnership will work best if we are holding our selves accountable for doing our part and making decisions that are based on what’s best for the partnership.  While it may all seem basic, there is a reason my mentor told me all partnerships end.  Remembering that line, I remind you that we get to choose if they end good or bad and that choice starts with how we act each day.

I would love to hear about your experience with partnerships or you thoughts on how to make one successful! 

Photo: buddawiggi