Deciding to bring a property investment partner on board isn’t a light decision. It can be a crucial step in setting up a successful real estate investment business. Choosing the right partner has the potential to make or break your real estate business.
When looking for your property investment partner, it’s advised that you approach the task with rigor and due diligence. Here are some of the first things to look at:
1. Do They Bring New Expertise To The Table?
A good rule to use when finding an investment partner is to look for what they’ll bring to the table. A good property investment partner will provide something the partnership doesn’t already have.
If you’re just starting, your partner must know a lot more about property investment than you do. One of you will need to identify which properties can be most rewarding in line with your given objectives. To do this, they must know how long you’ll need to hold a property before potentially letting it go versus how long it’ll take for the same rental property to start yielding a positive cash flow. In short, they need to know if buying a given property is going to be profitable.
It isn’t bad if you and your potential partner have similar strengths. But you must also be highly skilled in different areas.
If your partner can only do the things that you can also do, then they might not be the necessary partner that you need. So, look closely at what value your potential partner might add to you before deciding to pair up with them.
2. Do You Share Common Objectives?
If you want to build a successful partnership, you have to make sure that you share the same expectations pretty early in your discussions with your prospective partner.
It would be disastrous if one of you were thinking of investing for overnight success while the other was investing for long-term success. In this case, strategies and expectations would conflict and one would have to give up.
Before committing to a partnership, it’s crucial that both of you have to compare your objectives to see if they’re within each other’s vicinity. A good partnership is driven by the same objectives and expectations.
3. How Ready Will The Two Of You Be For Capital Calls?
Things don’t always go according to plan. If they don’t, you’ll end up having to pull in additional funds, would the two of you be able to do so?
If you’re low on capital, an ideal partner will have to invest their money into the partnership in times when you can’t. Even if you do have money, getting a partner who can hold their own will help you go through the tough times in your investment journey.
Property investment with a great undertaking might result in losses because of various miscalculations. In those times, if you chose a partner based solely on their in-depth expertise in the industry without respect to their financial capacity, you might get stuck.
So, it’s important to gauge beforehand, your partner’s financial capabilities and how it might help and grow the partnership.
4. Are Your Personalities Compatible?
Nothing can suffocate a theoretically perfect partnership more than a clash in character. All that paper you signed might turn into a ball of fire pretty quick if you don’t take a moment to assess both your personalities and how well they might or might not work well.
A great property investment partner will be someone you can work with and agree upon. One of the many partnerships focuses on money, expertise, etc., and forget that at the end of the day, all those could amount to naught. If the two of you can’t bring yourselves into an agreement, nothing will be done and many things will be affected.
So, as you assess everything else, make sure to pay attention to your personalities and characters’ compatibility simultaneously. Make sure to choose a partner that is compatible with your personality, character, goal, and objectives.
Going For Gold
When getting into property investment, whether you’re going for short-term or long-term investments, you’ll be expecting to make a profit. If you’re thinking of roping in an investment partner, you’ll most likely have contemplated the advantages of getting additional help versus going solo. So, you better make the partnership worth it by choosing the right partner.
Choose a financially stable partner with a lot of experience in areas that you aren’t as experienced, with who you share objectives, and have compatible personalities; then, you should be off to a good start. Property investment will require a lot of strategy and foresight from both of you. The very best in this promising journey!