Just came across this app/group and became aware of BRRR. Just getting started and without enough cash capital to start buying homes out of pocket, does anyone have any tips on partnering up with other people to grow the money while I continue to save up? I'd like to be getting my feet wet in real estate while I build up my savings further. Any tips on how to find a good partnering opportunity or reasons to avoid it?
Do you have any like minded close friends that would be interested? I got my start with three friends tossing in $100/mnth into a joint account that we invested in the stock market. We did that for 7 years got a little lucky on the timing when we decided to sell our stocks and buy houses. That 7 years allowed us to grow together and learn how each of us thinks about money. We bought our first house in 2007 and well the rest is history now we have around 5M in property.
@Mark Trebor Great idea on the joint account with friends. Wish I had thought of that 30 years ago :)
@Scott Rogers - Working with friends was/is an experience. After owning 3 houses with 4 guys we parted with one partner that was more interested in what we are going to eat for lunch then working on the house. But we bought him out per our partnership agreement. I think he's happier and I know I am. He was more of a co-worker then a friend so breaking that connection was not as hard. So now we're down to three guys and we still have struggles, but there has been more positive experiences then bad experiences. Making money each month has helped us appreciate all that we have done over the past 19 years.
While I am strongly for this option, my wife does not agree with me on bringing other people in. How did you guys structure things? Did you form a committee or an LLC? Did you vote on options or was it round table discussion?
@Derek Mckenzie We have an LLP, we discuss everything and usually come to consensus. There are only three of us now so that makes things easier with 4 their was often a 2:2 split but from the very beginning we agreed that 2 people could not force the other 2 to buy a house, when it came to buying the house everybody had to agree. Where we run into problems/disagreements the most is maintenance. Defining what is good enough and what is necessary is tough, but after almost 20 years we know each other pretty well and we know who likes new windows and who just wants to replace a broken window pane, who thinks a $10 gasket on an exterior door will last a couple of years and who wants to spend $1000 having a door professionally installed. We basically have some unwritten understanding that everybody in the group gets something they like every once in awhile. I think the biggest thing is if you bring people together you need to be like minded. If somebody wants to only do the accounting and 2 people want to do the dirty work, eventually somebody is going to feel taken advantage of so do your best to split the work out evenly. We have a quarterly meeting where everybody gets a chance to vent their frustrations with what has happened in the previous 3 months. We talk about finances, budgets, goals for the upcoming year and problems we see on the horizon. Good luck
Go to your local REI meetup or REIA meeting.
@Mark Trebor thanks. I appreciate the insight!