4 Lessons I’ve Learned From My Made-in-Heaven Real Estate Partnership

by | BiggerPockets.com

My current real estate business relationship is truly a match made in partnership heaven.

Unfortunately, a lot of people don’t seem to be able to say this. They aren’t in good business or real estate partnerships. Maybe you’ve even had some bad ones before (I’ve had several). Yet when you do find that great match, you can enjoy going much further and faster than you could alone. The company can make the journey so much more enjoyable, too.

So what should entrepreneurs and investors be looking for in a great partner and partnership? Here’s some insight on how things are structured in my real life current partnership.

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Create Alignment

You’ve got to have alignment. If not, you’ll tear everything to pieces as you head in different directions.

When it comes to picking a partner to have in a company, especially when equity is on the line, make sure your goals and interests are aligned. If one partner wants to build the company to sell and the other has a vision of building to continue as the long-term operator, it may not be the best partnership. I always recommend finding someone who shares your vision.

Yes, there are times when we disagree on things. I mean, business isn’t all flowers and roses all the time, right? We don’t see eye to eye on everything all the time, but we always work things out to reach an agreement and get on the same page. At the end of the day, it comes down to achieving the big picture vision. Decisions should always be geared towards that.  


Related: The Most Flexible & Tax Efficient Way to Structure a Partnership

Find Someone Who Completes You

My current partner is a numbers guy. He’s always working with those darn spreadsheets. When it comes to implementing systems, he is the go to guy. My side has always been about the sales, marketing, and business development. Personality-wise he’s more of an introvert. I’m an extrovert. Some skills may overlap. This is completely fine — especially in areas that are of the highest value for the company. For us, this is property acquisitions, running rehab numbers, and property management.

I know how to read a spreadsheet; it just doesn’t excite me. He can analyze a deal and fill out a contract, but he’d rather be in the office than knocking on doors and meeting people. You don’t want to have identical skill sets — that makes one of you unnecessary. Then you’ll have to hire out to cover more gaps for certain needed skills. But understand not just what you are good at, but what you thrive at, too. 

Related: The Biggest Real Estate Moguls Relied on Partnerships. Here’s Why You Should, Too.

Know Each Other

Carrying on from the last point, there should be clarity about roles and skills, etc. The great thing about structuring a partnership the right way is that the other partner should know when he needs to take over something. In the event we need to run financials, my partner will know to take it and run with it. Likewise, when it comes to anything in the marketing department, I know that’s my responsibility. This factor also rolls over into understanding when your partner has their plate full or if something else outside of work is demanding some of their attention.


Have a Plan for All Scenarios in Advance

Anything can happen. I expect this current business relationship to last. Many don’t. Sometimes you can’t tell in those early days. Just like in personal relationships, some people change, some don’t, and some appear to be on the same page but aren’t. Some become more invested when things go well. Others might derail your work. Or you or your partner may face totally unforeseen circumstances in your personal lives. You just don’t know.

What I do know is that it is always better to have good partnership agreements and to have a plan for all contingencies. It makes things much cleaner, simpler, more streamlined, and more amicable if things don’t work out. The partnership agreement will give you a predetermined guideline to handle the toughest situations, and when this is in place, your clients will be better served, as will all of the partners.

What have you learned from your real estate partnerships?

Let me know with a comment!

About Author

Sterling White

Sterling White is an investor and business owner on a mission to make the world a better place through principled and efficient real estate investment.

Even before co-founding Holdfolio, Sterling and his partner Jacob Blackett had been involved with the purchasing and selling of over 100 SFRs. Today, Holdfolio is a prominent platform for investing in income producing multifamily apartments. The firm has been featured in national publications such as US News and was ranked as one of the best real estate crowdfunding sites in 2018 by Fit Small Business.

The success of Holdfolio’s technology gave birth to SyndicationPro, a fast growing all in one software solution empowering investors to efficiently and easily raise capital online.


    • Sterling White

      A couple that we have:

      1) Buy out provisions. In the event one of the partners decides to sell their ownership.
      2) If a partner commits an unlawful act. Then the other partner has the right to fire that partner for such a behavior.
      3) How decisions are made between both the partners. Its a 50/50 vote with us. Ex: when hiring an employee we both have to agree

      These are the main ones. Hope that helps.

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