The First Deal: Mentoring vs. Partnering

[Shafi Noss]

Hi everyone,

A partner and I are getting set up to do our first deal, and I'd like to ask your advice on how best to learn.

We've seen two partnering styles: Bring a deal or money, and partner with an existing operator _or_ find a mentor who has interest in the deal to look over your shoulder and make sure things are going right. Our main goal right now is to learn, since we plan to do more deals in the future, but we're not sure which choice is best or if there's anything we're not thinking of.

Any thoughts or advice?

[John Corey]

Be careful with any JV deal involving a mentor where they get some or all of the upside you take on all the downside risks. If the mentor has nothing in the deal. their advice might not be balanced. Rather than say to avoid all such structure, just check very carefully that your mentor really knows what they are doing if they only share in the profit.