Pro's and Con's to "Partnering Up." What are your experiences?

Question

This morning I was reading the Bible (No I'm not going to bust out a sermon... unless you need me to).

I read a passage that basically said "Two people are better off than one, because they can help each other succeed. If one person falls, the other is there to help them up. But someone who falls alone is in real trouble."

This got me thinking...

Since I began investing in 2011, I've been opposed to "partnering up" with other investors. I've never really taken the time to understand why I'm opposed to the idea, but if I were to guess it would likely be some form of "greed." Why should I share my profit when I don't have to?

(It doesn't feel good to write that, but I'm just being honest here.)

I understand that may limit the opportunities available to me, but before I decide to do a complete 180° on my position I'd like to hear about other people's experiences, good and bad, with teaming up.

Why do(n't) you partner up?

Caleb Heimsoth · Answer

@Brendan Winans. My business partner and I just closed or first deal together actually.  So while it’s been fun so far the real fun is just beginning.

So far I would say having a business partner is well worth it for me.  It’s a way to split tasks and pool resources.  While they didn’t have any RE experience when we met, they had other things to bring to the table.

My advice is be open to partnering but be careful with who you do it with.  Make sure your investing strategies align with each other.

Frank Wong · Answer

The partner you choose needs to bring something to the table. Are they bringing experience, a deal, money?   It's very hard to find someone that thinks operates and works as hard as yourself or if you are on the other end of the stick.  Your partner may work harder than you and may want out.

The best partnerships are the ones that are silent money investors.  They invest with you and allow you to be in control.  Other than that I would not be interested in one.  I am not interested in a partner that their value proposition is hard work and free labor.  An experience money investor is also important.  I don't want someone investing in a deal and them calling me every day about it.  Not worth the headache.

Steve Vaughan · Answer

I'm a why guy. Gotta be deeper than 'making money '.  If they can at least answer why 3 times, I then have required reading. Will discuss the book(s) over coffee for 15 mins after they read them.    Guess how many call to discuss the book?

Steve Vaughan · Answer

I've 'partnered' with a trusted private money lender successfully.  After years of happy dealings.

I have turned down many partnership opportunities in RE, coaching, podcasts,  etc. Mostly because they were willing to do the work  (or so they said) but had no experience or money.

The biggest reason though, was no why that mattered.  Making $x per month is too shallow IMO.  They had no response past asking why twice.  I had 5 more.

Frank Wong · Answer

Exactly!  You are the expert in your field you don't need any advice from someone else.  Only 1 Chief in the tribe.  I keep the same philosophy when I invest in large apartment syndications. I write a check and shut up.  I am not an expert in that field.

Seth Ferguson · Answer

Hi @Brendan Winans,

The key thing is any partnership or group is alignment of interests. If they're a) a good person and b) want the same outcome as you do, it's likely worth working together.

John Thedford · Answer

I would consider how much money and what they bring to the table besides the cash (if anything).

Brendan Winans · Answer

@Jay Hinrichs Thank you. Although I do take the Bible literally, I'm not saying the verse I read over coffee this morning is the pivot point for my entire investment structure. It simply got me to question why I've been apprehensive about partnering.

Most of your partnerships have been great. What made them great?

... and the bad ones, what went wrong and how could you avoid that in the future?

Jay Hinrichs · Answer

I would not let a bible verse that you take literally influence you .

My old partner in Timber would say were there are a multitude of counselors there is wisdom or something to that affect.

so no problem getting advice from the multitude but you don't need to go into contractual arrangements.

I have had many many partners over the years. 95% were great its the odd one that does not work that causes you some real grief so be careful.

Brendan Winans · Answer

@Frank Wong I relate a lot to your response. I feel a silent money investor would be the best way to open up new opportunities, without inhibiting how I work. Sort of a "let me do my thing, and we'll win together" type of thing.

Pro's and Con's to "Partnering Up." What are your experiences?

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