One of the best ways to get started in the real estate business is by finding a partner that can help close deals. Locating this partner can be as easy as asking your friends and family or as difficult as vetting a dozen fellow investors at an investment club meeting. Regardless of whom your partner is, nobody will want to work with you unless you bring something to the table. In most cases, you can either bring time, money or knowledge to any deal. Before you start looking for a partner, you need to know what your strengths are and why someone would want to partner with you.
Just because you want to work with someone doesn’t mean they will want to work with you. If the reward is not in line with the risk or with what they have to give up, they will certainly walk away from the deal. It is important that you know where you are strong and where you may need help before you consider working with anyone. In most cases, the individual with the money will hold the key to the deal, but this is not always the case. If there is an uneven allocation of work or time, it could throw everything off. If you can do just one thing well on every deal, you will have no trouble finding someone to work with.
If you are just starting out, you are most likely full of time and energy. You want to get that first or next deal under your belt as quickly as possible. You may even have a method of acquiring leads that just needs someone else to fill in the holes. If you can dedicate time putting the deal together, you have value. Even after the deal is started, there will always be little, time consuming tasks that can be burdensome to busier investors. This can be your niche and the reason that someone may align themselves with you. If you are willing to do the dirty work to get the lead and work the deal, you will put yourself in a great position to find a partner to make the deal happen.
Secondly, you could have a knowledgeable foundation int the real estate industry. This could be knowledge of a specific property or knowledge of how a process works. Everything from tax lien auctions to foreclosures are real ways to get deals. The more you know, the more of an asset you are. Nobody wants to spend time explaining everything as they go or working with someone they aren’t confident can get the job done. By having a niche that you know really well, you can almost have your pick of who you want to work with. The key is to stay updated and never let your knowledge base slip. If you proclaim to be an expert in an area, you had better know of any changes that could impact future deals.
If you have money or access to money you can almost always find a partner. Without money your deal will not get very far. Money alone does not mean you can demand a lion’s share of the profits or pick and choose your terms but it does put your in a much favorable position. Even if you have cash you are looking to invest you need to know what everyone is doing on a deal. There are many cash partners who want to contribute money and see a check at some designated point down the road. There are also cash investors that want to know what is going on every step of the way and are involved in every decision. Regardless of what side of the deal you are on you need to know what everyone is bringing and what role they will have. Financing deals is obviously important but there is more competition now than ever before.
Whatever it is you contribute you should know exactly what is expected of you in regards to time, money, knowledge and eventually returns. Where most partnerships go sour is when one side fails to live up to their end of the bargain. If you are expected to provide something to a deal you have better deliver or you may have a tough time finding a partner in the future. Investment groups and networking clubs are a fairly close knit community and they communicate with each other. If word gets out that you dropped the ball on a deal news will spread and your reputation may take a hit. If you do not have all the components to complete a deal on your own you need to know that you are going to have to sacrifice something and see a diminished return. Making something on a deal that you would have not been able to close on your own is always better than not making anything.
One of the best ways to grow your business is through a partnership. Whether this is a one-time deal or something more long term you need to know what it is that would make someone want to work with you. If you have something you do well, make it your focus. If you don’t, work hard to find one.
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