You already know that pooling expertise, money, and other resources is a great strategy to invest in real estate. But you also know that a partnership is only as good as when you are partnered with the right people and have a mutually beneficial relationship.
Where to find a real estate investing partner
There is no right or wrong answer. You can start by trying to find the partner and then together you go find the deals. The other option is for YOU to be the one to find the deal and then from there, you find the partner.
We prefer getting out there and finding the deal first and then use that as your carrot to find your partner. When you hold the deal in your hands, you have much more leverage and value that you are bringing to the table. There is a saying in real estate investing, If you have found a great deal, finding the money is the easiest part of the equation.
So, how do you find a partner? The short answer is network everywhere possible. REIA groups either live or virtual, Facebook groups, email lists, referrals from friends, or find hard money lenders with a huge list of clients looking to partner on something.
Forming a partnership in real estate
Once you have found a great partner, how do you protect yourself? ALWAYS ALWAYS ALWAYS have a written partnership agreement.
Forming an LLC with an operating or partnership agreement that makes things legal and official is our preferred way and our recommendation when it comes to partnering on real estate investing.
- The structure should leave each of you with an equitable amount of upside, risk, and exposure. It’s easy to think about what happens when the money is rolling in, but what you really should focus on is what happens in the event of catastrophic failure.
- Have an exit strategy and talk about it with your potential partner. Not all partnerships work out, so it’s best to plan for that together.
- Keep things fluid and open for change after your first few deals. Partnership arrangements don’t have to be set in stone forever and should actually be modified depending on the project. If someone is bringing more to the table than the other, be ready to renegotiate how the partnership is structured.
- Never burn a bridge! Even if things don’t work out in the short run, you never know what will happen down the road.
- Do your research! Arming yourself with knowledge is a great way to ensure you’re not getting yourself into potentially dangerous situations.
We hope this has helped you if you are a new investor or someone who has been thinking about taking on a real estate investing partner. GL&L Holdings, LLC can assist you in funding most of your real estate transactions. We are also open to do joint ventures as we have done many times in the past and are willing to do so if it makes sense for everyone. Our goal is to always have a “WIN-WIN” strategy.
