How did you select a partner?

[Brad Clarizio]

Hey everyone,

Some of you may have read my "Taking Real Estate to the Next Level" thread, in which I talked about different directions I want to take my life and my business. Well, great things have happened since then, including securing a $150k commercial equity-refinance from a local bank. I'll have the money in the next couple weeks and have my eye on a couple of deals. 

My new question is : For those of you with a partner, how did you find/select them? 

I haven't come to full terms yet on having one, but I do think in the near future I'd like to bring in a partner to help grow even more. A few of the most successful REI's I know do have at least one partner, and I have to accept that I may not be able to do everything myself (I'm not the best at financials), especially as the Columbus market grows and I continue to acquire more.

I bring quite a bit of experience, cash, and rentals to the table, so I'd want a similar contribution from a partner. I don't want to choose someone who is "exploring real estate" with an accounting degree...that's simply not enough. So, what did you look for in a partner, and how do I determine what makes sense for them to "buy-in" to my already well established business? 

Thanks in advance! 

-Brad

[Matt Stewart]

@Brad Clarizio

For me it comes down to two simple things when considering a partnership, time vs money.  I'm in the fortunate position to have more of both than many, but I'm not willing overindulge in either.  And they both tend to fluctuate depending on what I have going on.  In the times when I'm heavily invested I'll consider a money partner with the understanding that I will be the one investing the majority of time and effort in the project.  Profits will be shared, but the ball keeps rolling.  Other times I'm in more cash and I prefer to be on the other side where I can find a partnership that saves me time and frees me up to pursue other sources of income, partnerships, and explore new possibilities.  

There's a lot variables to consider when taking on a partner.  Clear communication about goals and expectations is vital.  And of course written documentation is also a good idea, especially when dealing with a new partnership.  It sounds like you've got a fair amount of experience and you've got the finances, so the question would be, what does a viable partner for you bring to the table?  It has to be something that's worth half of your profits.  Otherwise, why bother.