Partnerships in real estate investing: When are they necessary?

[Ivan Guillen]

I am almost positive that everyone has heard great success stories about partnerships! Along with that, some have also either heard of or dealt with a bad partnership. So for those starting their investment portfolio, when should we seek a partner in the industry?

Collaborating with someone on a project is great, and can bring extensive experience along with a ton of learning lessons. Partnerships allow for investors to learn from each other, tackle a deal together, limit liability, and share ideas on growth. They are not always necessary though, and one should be careful when partnering with someone.

From experience with various business ventures, I have learned that partnerships can make or break an operation. The main reason I entered into partnerships early in my career was because I was fearful of taking on a big venture. Looking back now, I realize that I did not need a partner on some of these projects. Collaborating with someone gave me a sense of comfort that I had someone to fall back on if there was something I had a question on in regards to the business. Sometimes my partner and I had similar skillsets and knowledge, so nothing new was brought to the table, and it caused several conflicts due to us wanting to work on the same thing. Not only did it cause conflict, but it also made the business stagnant because of our similarities. 

In my opinion, and from dealing with several successful and failed partnerships, they are not always necessary. Collaborating with someone is great when the partner brings different values that they can add to the partnership. If someone has different expertise then the partnership can be great! I believe that this is the key to a successful partnership, you have to find someone that brings a value to the table that one could not do on their own. This allows for work to be split up on the project, learn from their area of expertise, and bring fresh ideas that lead to growth. If they have the same expertise as you, then doesn't it make sense to do the project on your own?

Now, after learning from my mistakes, I have started to seek out partners that are either bring a different value to the table, or someone who is further ahead in regards to expertise. I anticipate doing so will bring more success to my investing and growth in real estate.

Hope this helps, and I would love to hear about your experience on this topic!

Drop some experiences or knowledge down below!