Hi everyone. I have been lurking on BP for a little while now and simultaneously discussing my plans with a friend who is a potential business partner. Aside from him, our parents also want to partner up. I have been thinking about the pros and cons of partnering with them on our first property and continuing to do so as we move forward but I cannot help but think that four people partnering on one, or even two properties is a bit excessive.
Both of our dads have excess cash they are looking to invest so we are looking for them to help us get started. My buddy has no liquid assets but can hustle and has lots of contacts in our area. I have some excess cash I am also looking to invest so while it seems like a no brainer that we all help one another, I guess I am just second guessing the idea since the little cash flow we will have at the beginning will be split so many ways.
I was hoping to get some unbiased opinions so anything you are willing to share would be appreciated. Thanks.
Welcome to BP! Can you do this without your broke buddy? If so then do it. Partnering with your dad can work but make sure everything is on paper and there are no unspoken or hidden expectations not in the paperwork.
So I have a question for you. What's the best way to ruin a happy family reunion? Answer: Invest money together. haha
It's kind of a joke but it's really kind of serious because it happens much more than people think it will and unless everyone knows their role and even more important stays in their lane then clashes, misunderstanding, bad feelings and unresolved issues will haunt you for years even after the investment has been disposed of. The tricky part is you really will never know if it'll be smooth sailing or an ongoing nightmare until you're actually in the middle and everything is going sideways.
So, my advice is if you do not need partners, do it yourself. If you don't need family or friends then take the money. haha
But really my friend be careful investing with friends and family. Remember nothing is more important than friends and family, even if you do invest together keep your friendship a priority over the money.
That's the best advice I have.
Aside form what the above mentioned about partnering up with friends and family, make sure the partnership makes sense. Everyone should bring something different into the relationship. I would never partner with someone that can do what I can do. There's no point.
My best advice is to remain autonomous. Get a good mentor and pay attention to what they have to tell you. Why split money 4 ways when you don't have to ? I have a mentor that told me a story about how he got started in the business, and he specifically spoke about not having partners. He explained that his perceived need for a partner was based on fear. No fear and no stopping you. Allow them to invest in you if need be, but it has been my experience that everything should be in writing ALL THE TIME. Doesn't matter if your partner is the lord Jesus Christ , he needs to sign an operating agreement and contract stipulating any and all nuances involved in the deal. My 2 cents.
Honestly I would only involve those who you ABSOLUTELY must have involved to be successful. The more cooks in the kitchen the harder it gets for so many reasons. Plus honestly I have worked with friends and its always gets muddy (i.e. we have paid more money honestly for the sake of our friendship). That's why at this point my husband and I personally prefer to just have each others as partners. Keeps it simple.
You have lots of good resources here on BP and can ask questions and learn how to find your own deals. I echo what others have said. My best and most pleasant investment experiences have been without the partner.
First off, thank you to everyone who has responded, I really appreciate your unbiased opinions and insights!
As many of you have mentioned, I am well aware of the negatives that come along with working with friends and family and that has been the biggest reason I have felt so uneasy about this potential partnership. Everything mentioned is exactly what I have been thinking over the past few months. I have already started laying the groundwork to let them know I will be venturing off on my own.
It looks like I will doubling down on my efforts and who knows, if something big comes available and I need the partners, now I know who is interested.