Hey everybody, I have a bit of a dilemma I would love some input on.
I'm a beginning investor. I actually just closed on my first two unit property. Now that I'm done with this deal I'm looking forward to the next. After buying this rental I've realized that I can't continue to buy rentals without building more capital, so now I'm going to do some flips. Here's where the dilemma starts.
I've been struggling to find a partner in my area to go in with me. Everyone seems to want to see me do one successfully before they partner with me.
A coworker of mine heard that I was looking for a partner and has said that he's interested in doing this with me. I would be very excited to have found someone but in my experience this guy has not been a man of his word. It's really all been little things like him bailing on plans we made without telling me, or telling me one thing and a different coworker another thing.
I think with money on the line he might be more reliable, but I'm struggling with the decision to team up with him or not.
Any insight on the situation would be greatly appreciated.
One of my guiding thoughts has always been "when in doubt - don't". Yes, I have missed some decent opportunities but I have also found that errors of commission hurt more than errors of omission.
I would go with your gut feeling, it’s never wrong
@Robert Wentland . Mixing real estate with a co workers seems like a really bad idea. Keep the two separate
I think with money on the line you need someone you can trust completely. That clearly isn’t the case with this guy. Pass.
Partner selection is more important than property selection. Real estate investing is supposed to make life better.
I think you know the right answer already. Trust your gut, pass.
I recently met what appeared to be an excellent strategic equity partner. Twice this person did something contrary to what they said they were going to do. Although this person likely has the access to the capital my business sorely needs, I am moving on and continuing my search. For me, actions are paramount, words cheap. Were I you, I would pass and continue to seek someone who does what they say they will do.
@Robert Wentland if you wouldn't marry them, don't partner with them. The relationship is just as complicated
Back in the desperate $$$ dark ages I fell for it. A group of motley co-workers got together to partner with me on several properties. BUT it was like herding cats to get work done, then had to listen to emotional, demanding 'your never home' wives, too much beer on the rehab & frustrations galore. After the 1st one sold I bought them all out for the cash they had in plus 3%, as per our contract. If you do decide to waste your time on this flake, write it up & remember what those on BP told you :)
Pass. You need one or the other. You either need a silent partner who will stay out of your way or you need someone who brings skills and is reliable. Coordinating with others is difficult enough in the best of circumstances, and you have already identified this person to go back on their word.
Congrats on your first buy, I suggest spending time fine tuning that one while searching and saving for the next option. I'll bet there are all sorts of things still left to do with the first one!!!
@Robert Wentland credibility is a two way street. All the other investors are passing on you because you have no experience. The solution here is get experience. Otherwise you are going to be stuck looking for a partner who is willing to look past your shortcomings. Anyone looking past your shortcomings probably has some of their own.
Thanks for all the input guys. I think going with my gut and not partnering with him is the right way to go.
You did answer it in your original question: with money on the line he might be more reliable. Key word, MIGHT. Willing to chance it? Why would he be more reliable to you about his money if he lies to you for free to start with?
@Robert Wentland one thing you can bet...it will never be better or easier than it is in the beginning, when everyone is on their best behavior
Partnering can be a great thing, but could also be a nightmare. The key is to partner with the right people. Honesty is an important part of that, even if he turns out to be honest if you don’t trust him that is also an issue. Better to keep looking until the right situation presents itself.
Good Luck! Aaron
@Robert Wentland hard pass brother. Either find someone like minded, or find someone who fills in your gaps. I say this as someone who is looking for the same things. Can’t rush it. Is there any of your close friends you came up with that you trust with your life? Pitch your plan to them.
Like everyone here I would pass without a second thought. I always just browse the post here, but your presented description made me register so I could respond as I suffered greatly from a similar situation. Unfortunately, your co-workers lack of being able to follow through with little things that don't even involve a deal......well the chances of him not living up to his end of any deal are high. I was once doing very well financially, did a couple of flips and it was looking like thing would go full steam ahead. The description of the relationship with your co-worker was an experience I went through with someone in my life. My getting involved financially with the person, along with a weird series of separate events which occurred at the same time, was the downfall. Granted the events were out of my control, and I could not change the actions of other people, but nevertheless one thing after another financially ruined me. Please learn from my main mistake......I gave people to much benefit of the doubt, trusted people at their word, and did not trust the warning signs slapping me in the face at times. 8 years later, I still have not fully recovered financially, and I struggle to take care of my now disabled wife. I have kids too. Trust your gut. Sometimes what we think is just one situation, which if doesn't work out won't affect other areas of life, but they can and do. I wish I could research partnering with you legitimately, however all I have to offer is sound advise. Please Take It. Do not let you desire to succeed, cloud your vision so much, that you fail to see the warning signs. Good luck to you my friend.
“You cannot make a good deal with a bad person” - Warren Buffett
This quote comes to mind almost daily for regular decisions of mine, and I’m sure it has saved my back more than a few times!!
P.S. there are a bunch more folks on bigger pockets, or already in your network of friends, family, acquaintances who might partner with you.
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