My business partner point of view

8 Replies

I have a know who is successful in the rental property side of real estate and I asked him if I can invest with him and he said yes. The only thing I have is trust in him and no knowledge of the business. So, he told me that he owns a apartment complex and the tenants pay and after the taxes maintenance and fees this is the profit each month. I get a proportion and he get his. Not to mention I am in the military so when I get a chance to go home which is very rare because I am busy a lot he promised to show me about the business because I am in the dark and he never did. He said let's use a prepaid card and he never used it. I tried to open an bank account but I really did not want to at the time. As a investor this makes me feel uneasy but  I trust him because I used to work with his mom and he appreciated very much. My question is, is there a article that would explain his point of view? I don't know if he is busy with the business and that is why he is neglecting me. Or I don't know if he would be the property manager or landlord. Any insight would be greatly appreciated. 

@Kendall Mitchell , I would be very careful about this from what you have said so far. 

1) How well do you really know this guy?  You worked with his mother before, but how many hours have you actually spent talking to him face to face and getting to know him?

2) Prepaid card?  Joint account funded with only your money?  That's a big NO SIRREE BOB!  

3) You mention you already have trust issues with him.  That for one reason or another (you were busy doing other things, or he didn't make time for you) he never met with you to discuss the partnership in more detail.  He hasn't given you any reason to trust him with tens of thousands of your dollars.

4) Contract, contract, contract.  If you really are going into business with anyone, you should have a contract that states how much money is being invested by each person, duties each person is responsible for doing, what percentage of the property will be owned by each partner, who is responsible for adding more money to the partnership if repairs/expenses exceed projections, if the partnership is dissolved how will the property be divided, etc, etc, etc.  Please, DO NOT PROCEED WITH ANY DEAL OF THIS SORT WITHOUT HAVING ALL THESE DETAILS IN WRITING.

5) Not pertaining to this guy, but don't jump into paying to attend a Real Estate Investing conference presented by some famous Real Estate GURU.  Just.don't.do.it.

If you are serious about getting into Real Estate Investing, please spend time on this site reading and researching as much as you can. While you're doing that, save as much of your money as you can, each and every month. The more you learn and the more you save will help you get a good start investing in Real Estate ... some day. I don't think you have enough knowledge about this field to start throwing money around TODAY. Soon enough perhaps, but please read as much as you can beforehand. And when you're ready, think of utilizing a VA loan to buy a two-or-three-or-four unit building, living in one unit, and renting out the other units. That would be a fantastic way for you to get going.

Good luck, Kendall!

-Randy

@Randy E. I used to be a nurse aide and his mom was one of my patients and his mom loved and had nothing but good things to say. Before I joined the service I would see him about once a week. I figure if someone takes care of your mother you would not try to screw that person over. About a month ago he deposited a check into one of my bank accounts and the bank bounced the check back because I hardly ever used that account which would be my mess up. The fact that he tried gives me a little hope but I guess my big mistake is I invested with a friend and with a business partner and I did not think I would have to be so thorough with a friend. But, I will definitely ask questions.

@Kendall Mitchell

I don't understand what the question/issue is. You invested money with this person? How much? What is the property worth? What amount are you getting each month? Is there a contract in writing? Need more details. 

Mark Gallagher, Real Estate Agent in New Jersey (#1221341) and Pennsylvania (#RS314542)
215-490-4851
Originally posted by @Kendall Mitchell :

 I guess my big mistake is I invested with a friend and with a business partner and I did not think I would have to be so thorough with a friend. But, I will definitely ask questions.

 Sometimes, when investing with an acquaintance you have to be just as thorough as with a complete stranger.  Business is business, and your hard earned money deserves more than to be handed over without any checks and balances.

Make the call today.  Ask the questions.  Get some answers.  I didn't realize you had already invested some money with this guy.  What exactly has happened so far?

@Kendall Mitchell

The rule of thumb to use is if you feel comfortable losing every cent you hand over to this other person then by all means give them some cash. If not educate yourself and when your ready then do it yourself. The great thing about Real Estate investing is this property has been here since the good Lord created the world and its not going away any time soon. My point.........no hurry.

Originally posted by @Randy E. :
Originally posted by @Kendall Mitchell:

 I guess my big mistake is I invested with a friend and with a business partner and I did not think I would have to be so thorough with a friend. But, I will definitely ask questions.

 Sometimes, when investing with an acquaintance you have to be just as thorough as with a complete stranger.  Business is business, and your hard earned money deserves more than to be handed over without any checks and balances.

Make the call today.  Ask the questions.  Get some answers.  I didn't realize you had already invested some money with this guy.  What exactly has happened so far?

 @Randy E. About a year ago I said can I invest with you he said yeah so I give him a check we keep in contact a couple times a week through email and phone. He keeps me up to date. It seems like he so busy because he goes in early and gets off late at night. But meanwhile I have been gone last year for the past 7 months so it is hard for me to do anything. I finally get back at the beginning of this year and I get a chance to go back home nj and we pretty got snowed in so we could not discuss business face to face. So now I am still waiting.

Originally posted by @Mark Gallagher :

@Kendall Mitchell

I don't understand what the question/issue is. You invested money with this person? How much? What is the property worth? What amount are you getting each month? Is there a contract in writing? Need more details. 

 @Mark Gallagher I was initially trying to find what his job title may be so I can better education myself. But it seems like I am not being clear.

Originally posted by @Kendall Mitchell :

@Randy E. I used to be a nurse aide and his mom was one of my patients and his mom loved and had nothing but good things to say. Before I joined the service I would see him about once a week. I figure if someone takes care of your mother you would not try to screw that person over. About a month ago he deposited a check into one of my bank accounts and the bank bounced the check back because I hardly ever used that account which would be my mess up. The fact that he tried gives me a little hope but I guess my big mistake is I invested with a friend and with a business partner and I did not think I would have to be so thorough with a friend. But, I will definitely ask questions.

This is business, it HAS to be thorough. While some people have been able to super successful investing with friends other have not for the exact reason you mentioned! You need to get everything in writing and spelled out NOW. 

Join the Largest Real Estate Investing Community

Basic membership is free, forever.