Equity partner

[Matt Good]

Good morning! What's the BEST way (if any) to find an equity partner? Just good ol' fashioned networking or is a hard money lender more realistic? Thanks!

[Ross Denman]

Hmm... I guess that it depends on the situation. I have no long term equity partners but have worked with a few for specific ventures. My experience is that a Great Deal draws interest. Network now as much as possible (I like LinkedIn Groups.) Get a great deal under contract and let everyone you can know about it. Make sure there is at least a 30% ROI so there is plenty of money/equity to split profitably. Most people don't want to put in $100k to get $105K back in 6 months (although 10% annual is decent for a passive position if the risk is accounted for.)

Build as much credibility as possible. Show diligence and professionalism. Figure as many risks/liabilities as possible. Create multiple exit strategies. Thoroughly figure holding costs, expenses, rehab costs, and build in a fudge-factor for unforeseeable hurdles (labor issues, material issues, unexpected problems, etc.) Create a thorough Summary and Scope of Work with Hard Data. If there's money to be made, someone will want to get involved.