Partnerships: When is the right time to pursue one?

Question

Hello BP,

I really want to grow my business this year and therefore I was contemplating partnerships and private money. I've listened to many BP podcasts that have guests that go this route and are very successful with it. I brought the idea up to my father last night who is a pretty successful businessman but not real estate investor. He told me to never get into a partnership as it is very risky and people change when money is involved. He said maybe I should consider doing it with someone that I've known for more than 10 years but that's it.

My questions are the following:

1. For those that have had successful partnerships with others or have used private money. Are these people that you've known for a long time? Would you recommend going the family route or trying to develop a relationship over the next few years with someone who knows real estate?

2. Would a quick partnership be less risky and worth pursuing? So rather than a rental business, do a flip and then end it?

3. Has anyone here had a negative experience with a partner or private money? What was the outcome? Did you end up going solo? Or are you in a partnership currently?

Thanks for sharing your story!

3. trustwothiness

Jackson Babcock · Answer

Hi @Stephen Brown I have had successful partnerships in different businesses. I believe partnerships can help you scale faster by dividing and conquering. The key is you must have the same values, goals and principles first and foremost. And of course good communication. When looking for a partner look for someone who compliments each other's skills and someone who brings value where you do not.  I think trouble starts when one carries all the load. Having a prior relationship helps because you know the person. With someone you don't know you should like them, get to know and be able to trust them. Make sure to get everything in writing when forming your partnership and have a clear view of operating roles. Good luck!