Real estate partnerships, when healthy, are a great way to increase the effectiveness of your business, while alleviating some of the pressures of the day to day responsibilities off any one individual in the business.
However, they can become a nightmare if the goals and values of the individuals in the partnership aren’t properly aligned.
5 Key Partnership Expectations
Therefore, before you decide on a long term partnership, not just in real estate but in life, you have to think carefully about who you work with and why. At the very least, you need to make sure you’re on the same page as your partner when it comes to the expectations in five key areas:
- Work Ethic
- Knowledge Base
- Distribution of Profit
5 Important Factors For Finding A Partner
- Honesty: Above all else, be it a real estate partnership or a romantic partnership, you must know that you can trust the people you’re working with. You want to know that there’s full transparency between you and your partner, and that anything they know, you know. You need to know that you can rely on them to work directly with your sellers or buyers with no concern. No true partnership can exist without being built on trust.
- Work Ethic: A lazy partner isn’t going to do anything but slow you down. You have to know that he’s going to hold down his side of the business. You have to know that he’s going to show up when he says he’s going to and that he’s willing to develop the expertise necessary to compliment yours. At times, hard work can even out-do talent and/or intelligence.
- Intelligent/Knowledgeable: That being said, you definitely need a partner who is intelligent or at least well informed. There are many aspects of a successful real estate company, and to be effective, you want to have designated responsibilities for you and your partner. Each of you will effectively specialize in your own responsibilities. Education will be a continuous process for both of you, but you need to be sure that your partner will know what he needs to know, will make the right decisions if/when he has to make them on his own, and that he will not make the same mistake twice.
- Fair/Not Greedy: As the old saying goes, “pigs get fat, hogs get slaughtered”. If your partner is greedy, it will affect his views of moral and immoral business practices, and profit-sharing will inevitably become an issue between the two of you. At the end of the day, you have to know your partner is a team player.
- Ambition: If you’re trying to build an empire and your partner is just trying to make some side money, there are going to be some discrepancies in the amount of time and sweat you’re each willing to put in. This is bound to cause disagreements and will undoubtedly slow the wheels of your business.
These are not all of the aspects that need to be considered when choosing a business partner, but they are very important and should get you pointed in the right direction.