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Updated over 9 years ago on . Most recent reply

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26
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Marwin Balibrea
  • Real Estate Agent
  • Fairfield, CA
5
Votes |
26
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How to (or should I) form partnerships with family members?

Marwin Balibrea
  • Real Estate Agent
  • Fairfield, CA
Posted

Firstly, I want to share that my family recently inherited a house in San Francisco that we are renovating of which my father is leading the project. This event acted as the impetus of my new-found enthusiasm for real estate. I am currently taking a home study real estate course for getting my salesperson license for future projects. 

I want real estate to become the 'path' to success. However, my father and brother, who I wish to partner with, are a bit close-minded and do not respect the intricacies of business. For example, they would rather rely on 'street smarts' or doing '$10 an hour' tasks in a rehab instead of hiring it out. They have no respect for business plans and following tried-and-true theories and systems. They are basically short-term thinkers.

I would love for my family to get into the business, but if they remain as they are now it seems like they would become more of a hindrance than an asset. So therein lies my dilemma. How do I influence them to adopt the business mindset? Or should I just go about the business solo and maybe just utilize them as assistants or act as project managers? What would you do?

P.S. I have not presented my business plan to them, at the moment, as it is incomplete and I am still learning. I am hoping this will instill the entrepreneur spirit in them.

Most Popular Reply

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17,995
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17,199
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J Scott
  • Investor
  • Sarasota, FL
17,199
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17,995
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J Scott
  • Investor
  • Sarasota, FL
ModeratorReplied
Originally posted by @Marwin Balibrea:

Thank you for the awesome responses. I do disagree as well that working with family is disastrous as many investors disprove this notion. Some examples of these investors would be @J Scottand his wife....

There are several reasons my wife and I work well together:

- We have very complimentary skills.  I come from an business/analytical background and she comes from a branding and marketing background.  So, split of responsibilities is clear. 

- We share our money.  Whether we do equal work, whether I do 90% of the work or whether she does 90% of the work, we'll never argue that either of us are getting the raw end of the deal,  since we pool the money in our household. 

- We came into the business with enough capital that losing money on our deals wouldn't put a strain on our financials or our relationship.  

- We didn't have any relationship "baggage."  In other words, there was nothing that could happen that would risk bringing up relationship subconscious issues from the past. 

- We both had equal (no) real estate experience starting out -- and equal professional success -- so there was little risk of either of us being overly competitive and letting our professional ego get in the way. 

I've worked with other family members, but always in an employer/employee relationship... While I would have liked to partner with them, it wouldn't have worked out because one or more of those issues above would likely have surfaced. 

In general, I'm not a huge proponent of partnering with family or friends (unless the friends were a result of an initial business relationship that succeeded).

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