Real Estate Investing Partnerships–Why They Fail & How You Can Succeed

Real Estate Investing Partnerships – Why They Fail & How You Can Succeed!

Lately, I’ve been involved in a lot of one-on-one mentoring with several of my

more seasoned students. I was approached recently by one of my students who was inquiring about

his partnering with a friend in business. It reminded me of business partnerships that I’ve had

in the past and after our discussion, I thought that it would be a great idea to compose a

multi-part series on business partnerships, why they often fail, and personal examples in my

professional past.

There are basically two types of partnerships – new and established.

Why do people form partnerships? Well, in my opinion, one of the reasons is

because real estate can be a very lonely business. Most people cannot appreciate how much work

real estate investing involves so consequently, they don’t appreciate what you do for a living.

Real estate investing can be scary. It can be overwhelming and this is why we form partnerships

- so we have someone to ride along with us in our journey.

It’s impossible to “know the unknown.” (unless you’re Donald Rumsfeld!) When

you’re first starting out, you don’t know the process. But if you have a partner, you can lean

on each other, which can remove a lot of the negative feeling associated with the “unknown.”

New companies might think that having a partner equates to less risk and better profit. It

feels like a partner helps mitigate the high start-up costs.

I found myself in a slightly different situation. When I decided to

partner-up, my business was already established. I had bought hundreds of houses and had

flipped 50-60 homes already. But I wanted to go to the next level so I brought on a partner in

an attempt to increase the bottom line. Partnering in business is sometimes referred to as the

“golden handcuffs.”

With this impending series dealing with partnerships, I don’t just want to

discuss the struggles and failures of partnerships; I will also be talking about small business

in-general. More specifically, I want to talk about those employees that can make or break your

company. If you hire the wrong people, those people have the ability to destroy both your

business and you personally if things go sour.

Are your employees an asset to your company or are they more like gangrene?!

In this series, I’ll elaborate on my personal experiences…obviously without naming names to

protect the guilty! But I feel like there are many, many lessons that can be learned the easy

way and that’s why I will be sharing my personal experiences with you.

I’ve been told that one of the reasons my students are fond of me is because I

will always give them the truth. I talk about my failures just as much as I talk about my

accomplishments. So, in this series, we’ll talk about: partnerships that have succeeded and

why, partnerships that have failed and why, hiring family or friends, how to deal with

employee’s spouses who are like “gangrene” to your company and cause unnecessary drama, behind

the scenes “whisper campaigns,” and that’s just a start!

Rotten partnerships and gangrene employees become like a virus, especially in

small business – one rotten apple can spoil the whole bunch. The next thing you know, gangrene

employees begin to be convinced of their version of reality, regardless of the facts. These

type of gangrene employees figure out the systems and loopholes and then they begin slacking

and taking advantage of the system. This is much harder in larger corporations but in small

companies one angry employee, or their angry venomous spouse, can tear down your company.

Before you know it, the gangrene plague has spread to all corners of your company. There is no

cure for this! Ive had a handful of past employees sow so much discord that I literally had to

let go of them and start over. Sometimes, this is your best option!

Look, no one company is perfect! So in this series, I want you to learn from my

mistakes so that your company is successful, profitable, and stands the test of time!