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<\/p>\nIs it smart to partner with a friend on real estate deals and real estate businesses?<\/p>\n
Partnering up can be a great thing in real estate. You can partner with others for a short time on specific deals. Or you can align investments together with others for the long haul. Or you could even go into business with a partner.<\/p>\n
However, this type of situation can also end up being a relationship that’s harder and more expensive to get out of than a marriage.<\/p>\n
Still, the biggest investors and funds use partnerships all the time. It\u2019s a smart way to lower personal risk, speed things up, and collaborate throughout your investing journey.<\/p>\n
The question is: who should you partner with?<\/p>\n
There are very different perspectives on this. Some swear they\u2019ll never do business with friends and family; others believe it’s the only way to invest.<\/p>\n
It’s possible to build a highly successful business either way. I\u2019ve had a variety of partnership experiences with different people. Some have fallen away; others have been okay for a while. Then, there are those that have really been amazing!<\/p>\n
If you’re considering teaming up with someone who’s currently your friend, there are certainly some things to consider first. Let’s discuss.<\/p>\n
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Related: <\/strong><\/em>How to Use Partnerships to Move Your Real Estate Business Ahead Faster & Further<\/a><\/em><\/p>\n Among the advantages of partnering with someone you know, like, and consider a friend are:<\/p>\n Billion dollar businesses have been built by entrepreneurs who teamed up with their childhood friends and then went on to create grown-up versions of their lemonade stands.<\/p>\n However, even with the best friendship in place, in the beginning, business can be tough. Not to mention, people can always change.<\/p>\n Think about going from casually dating someone to moving in with them. No matter how well you thought you knew them, it\u2019s a different game when you are with each other all the time under the same roof.<\/p>\n Life can take you in different directions, or you can grow to want different things. These things could introduce conflict to a romance, friendship, or<\/em> business relationship.<\/p>\n Like buying property, you have to be very objective when partnering with a friend. The failure rate out there is just too high to ignore it.<\/p>\n You\u2019ll be best protecting your friendship for the long term if you set up the partnership in a truly businesslike way from day one. The same goes for partnering with family, too. Avoid awkwardness at family functions in the event things go south by setting up the business relationship in a professional manner.<\/p>\n And if you are raising money, savvy investors will want to know you have all your bases covered so that they are covered, as well.<\/p>\n Begin by setting very specific boundaries, roles, and expectations. Be willing to have tough conversations up front. Map out what will happen if you decide to go your separate ways later or if one partner gets hit by a bus.<\/p>\n Put it in writing. Then, there shouldn\u2019t <\/i>be any arguments (but there’s always the possibility).<\/p>\n When I started partnering on deals with my first real estate mentor<\/a>, it worked really well. But eventually I wanted to move into a much larger scale and into multifamily apartments<\/a>.<\/p>\nThe Pros of Partnering with a Friend<\/h2>\n
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How to Set Yourself Up for Success<\/h2>\n
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