Any tips for someone going into a partnership?

Question

So i went to a meetup for the first time last week. Learned a lot, but at the end I talked to the guy putting it on. He wasn't really spammy throughout the conversation but I found out he has done a few partnerships for flipping to get people started. He seemed like he really knew his stuff, spoke the bigger pockets language (which I checked and it doesn't look like he's one of "us"). His investment company is here:

http://www.homesforthewin.com/

He's said he has done over 30 flips in the last three years but I don't really know if I have a way to verify that.  There was another guy at the meetup who said that he's doing a flip with the meeting leader in San Antonio, an hour or two away from where I am in Austin.

I asked him about his teamups and he said he can do them however I'm comfortable. I could find a property and he could pay a wholesaling fee. I could pay for the whole thing and we could split the profits and I could see how he does it directly.

It's *exceptionally* difficult to get into Austin flipping without someone helping you out. Too many variables here. I definitely don't want to get into a bad situation. Any advice?

Account Closed · Answer

@Brendon C. Hi Brendon, was this put on by John or by Phil? My partner in Austin goes to those meetups so if you'd like his take, let me know. Send me a PM. If it was somebody else, my partner may be aware of them but you'd have to check with him directly.

A lot of partnering is about what you bring to the party. If you have lots of experience that is one thing, if you have lots of money, that is another thing, if you have lots of connections that is something else. Make sure things are in writing and cover the normal contingencies. It is really easy for one side to assume things  based on a discussion but really helpful when the questions come up to have put them in writing.

Jason Hsiao · Answer

@Brendon C., you can probably look up in county assessor's records to see if the properties were transferred to his name or the entities he claim to do business in.

For partnerships, vet them thoroughly. I have some that work out great, some not so much. A quick easy way I've found is ask them about projects or when things didn't turn out as planned and what they did in those situations. You can pretty easily tell if someone is full of BS w/ that question. And yeah like what Account Closed said, get things in writing bc people have bad memories.

Joe Villeneuve · Answer

Here's what I teach, and what I follow.

There are 3, and ONLY 3 reasons, for forming a partnership.  Your Partner(s) MUST either:

1 - Do something you CAN't do

2 - Do something you don't WANT to do, or...

probably the most important one...

3 - Do something you SHOULDN't do.  Just because you can do something, doesn't mean you should.

Worst two partners?

1 - A friend that also wants to go into REI, where the reason for the partnership is to be each other's "security blanket"...even though you both lack the same things, and are strong in the same things.  That doesn't solve the weaknesses, and the redundancies just mean you're paying twice for all the things you CAN do.

2 - A relative that also wants to go.....aw, just read the same description for a friend above.