Should you partner on your first real estate deal?
In short, I don’t think you should! Why?
I think you should never partner on your first real estate deal because you don’t want to have two cooks in the same kitchen. In my opinion, I think it’s going to be very hard to find the right partner where the synergies align and you don’t get into any arguments. So, I recommend that you do it on your own.
Why I Don’t Think You Should Partner on Your First Deal
You should be the master of your fate and captain of your soul. So if you do well and make a profit, you’re going to reap the entire reward of that profit. And if you don’t do well and you lose money, you only have yourself to blame. You’re not going to get into any arguments with a so-called “partner.”
I’ve been down this path many times before—not just from a transaction standpoint but from a business standpoint. It’s something that I’m never going to do again.
Unfortunately, it often ends up as a disaster. There’s a sour taste in everyone’s mouth, and you just part ways. You might end up with an awful, emotionally drained, gut-wrenching feeling.
You don’t want that in your life! And you want to focus on as much positivity as possible. Real estate is a rocky road, so feed yourself with as much positivity as you can.
Now, the only way that I see a partnership working in business or on a specific transaction is if your partner is going to be completely passive.
Let me give you an example. Say, I found a deal and I know what I’m doing. I’m going to buy, renovate, and sell. I decide to partner with someone who is just going to give me the money, stay out of it, and be completely passive.
I’m going to do what I need to do. I call the shots; I pull the strings. The partner has no say but is going to get a fee or percentage—whatever you negotiate with that specific partner.
The same can go for business, right? If you’re starting a business, you don’t have your own capital, but you have the ability and knowledge. You’ve had previous businesses that were successful.
Sure, you can go to a potential equity partner where they come to the table with a certain amount of capital, but then they need to get out of the way. They have no say, and you control the reigns.
Keep this in mind. If you do lose, pay your partner back. You have to do that no matter what. Warren Buffet says it takes a lifetime to build your reputation and five minutes to lose one.
I’ve lost so much money in my lifetime. I stopped counting at a million—that’s no joke. Anytime I lost money and it wasn’t my own, I paid it back. That’s why my reputation is pristine to this day.
Watch my video above where I go into further detail about partnerships in real estate.
How do you feel about active partnerships? Do you have any success stories to share? Any failures?
Please comment below.