How are others balancing alignment of interest in partnerships spanning portfolios

[Stuart Udis]

For a number of years I've formed transactional partnerships (form an LLC with single or multiple members to buy a building, build condos, townhomes etc). I've become interested in finding an individual who can serve as a business partner (doesn't have to be 50/50, in fact wouldn't want that), but a business relationships that would span across the entire business and someone who would share some of the workload, guarantor requirement and capital contribution and capital raising responsibilities, all of which currently falls on me. The motivation is not necessarily to scale into larger opportunities but rather to achieve better balance and also optimize the performance of the projects and types of projects I currently pursue.

I have no shortage of individuals who possess specific skill set who would want exclusive rights to that particular service vertical in return for contributing capital and a partnership interest (construction background and wants to take over all construction duties or someone who is a sales broker and wants to list all of the properties etc.) I don't see anything wrong with that approach but there isn’t a complete alignment of interest (the individual who wants to take over all construction services will want to focus on the projects with the greatest construction fee earning potential; the brokers will want to pursue more for-sale projects etc.). These individuals also seem more interested in the ancillary fees the portfolio generates as opposed to the underlying real estate.

With the way my portfolio and pipeline is arranged I can understand why the construction management or brokerage verticals are most enticing but it still feels too transactional which is what I want to avoid. In my mind the partner who contributes and shares across the board will have a greater alignment of interests but curious how others have approached similar scenarios and views on the subject. Not as interested in how to paper a partnership agreement, really most interested in how others have successfully handled the alignment of interests component to business partnerships that span an entire portfolio.

[Jay Hinrichs]

Quote from @Scott Mac:

What @Jay Hinrichs said.

With the capital and experience to offer I've seen this work well as a joint venture.

Basically partnering on one single effort.

I have one long term partnership that we share capital but I still do all the work ( rain maker) he is a cpa so he does do the books and tax return though :)  WE built one subdivision together were he put in 500k and I made him 1.2 mil in 18 months net profit so that was not bad.