Thinking of Buyer RE with a Partner? Consider these things first:

[Alan Asriants]

Getting into real estate is tough as it is, and coming up with the down payment can be extremely difficult, especially if you don't have the income to support it. This is why partnering up with somebody can be a great idea. Coming up with half the cost or maybe if you have two partners 1/3 of the cost is a lot easier than all of it.

This all sounds great, right? But you need to consider the implications of investing with other people into real estate. Unfortunately, Real Estate is not like Stocks where you can buy it, set it and forget it. Real Estate is something that takes a lot of work effort, patience, and time. And it's extremely important that all the partners that are investing into Real Estate are all on the same page.

So if you're planning on investing in real estate and partnering with someone, consider the following things to talk about with your potential partners before jumping into a venture together:

1. What are going to be the roles of each individual?

This is an extremely important point, because if there is no clear rules defined by each person, then it can be confusing and lead to anger or resentment between partners. Because one person might think that they're responsible for this while the other person thought that they were responsible for the same thing. And if someone's not responsible for something else, then that Ball can be dropped which can lead to further consequences. For example, if both partners, track finances and no one tracks maintenance. Then you could find yourself in a position where tenants are extremely pissed off, small problems turn into big ones, and you've created a huge mess that could've been easily avoided. 

Before you consider going into a venture with somebody, establish the roles first.

2. Are you on the same page about your strategy?

Sometimes people get excited about the idea of investing, but they haven't yet decided what they actually want to do with the property. One person might want to fix and flip it, and the other person might want to keep it. Different strategies call for different procedures. You don't wanna find yourself not on the same page as your partner. 

Identify the strategies you both want to implement on a specific property and stick to it.

3. Are you on the same page about an area?

Location, location location! That's the motto of Real Estate. Do you and your partner have the same idea about what a B class area or a C class area looks like? It's extremely important that you guys both have a similar understanding of what an area means to you. If one area is a B class property for you, but a C class area for your partner this will likely lead to argument. 

I would want to know if my partner has the same views as me regarding the area. 

4. What are your renovation standards?

This has got to be one of the biggest points on here. This point is actually why I don't invest with some of my closest friends, even though we agree on many things. For me, I see a renovation as an opportunity to put in the right amount of money right away. For others, they see it as an opportunity to save money, and to skip on things. If one person is more worried about budget, and the other is more worried about quality, this can lead to argument. 

Pro tip: walk through some turnkey properties and establish for yourself, What is a good renovation and what is a bad renovation and see if you and your partner agree.

Being on the same page with your partner is extremely important to the success of your business and partnership. It can be the difference between a boom or bust. Although this is true, it is not 100% guaranteed that you'll be on the same page about everything which is OK. Sometimes a difference in opinion is a good thing. A difference in opinion and open mind can help another partner realize something better.

Good luck out there!