In many ways, having a business partner is akin to being married. What one of you does affects the other. For this reason, it’s important to do your due diligence on anyone you are considering partnering. Whether it’s forming a new legal entity, working together on a joint venture or contracting for rehab work, it’s important to look behind verbal reassurances and statements made by other people.
You can learn more about real estate investing in Coach Brian’s Real Estate Masterclass. However, there are several factors to consider when choosing a business partner for real estate.
First, look for someone with complementary skills: Partnering with someone who has different areas of expertise can be beneficial. For example, if you have a strong financial background, a partner with marketing or property management would be complementary.
Next, consider compatibility. It’s important to work well with your business partner, so be sure to choose someone who you get along with and who shares your values. As you mature in your real estate investing career, you will likely develop relationships with other people you trust and who have demonstrated their commitment to excellence over time.
If you are working with someone new, however, conduct some due diligence. Before entering into a partnership, be sure to thoroughly research the person you’re considering as a partner. This might include reviewing their background, speaking with mutual acquaintances, and consulting with a lawyer.
Fourth: have a clear agreement in place that sets out the terms of the your partnership in writing. This will prevent one partner from changing the terms of the agreement later on, and will make sure that both parties are clear on their roles and responsibilities.
Finally, it’s important to build in an exit strategy. It’s always a good idea to have a plan in case the partnership does not work out. Having an agreed-upon plan for dissolving the partnership can help to protect both parties in the event that the partnership needs to be terminated.
It’s important to be thoughtful and careful when choosing a business partner, as this person will play a significant role in your business.
