What are equity partners looking for in a partner?

[Bennie D. Cooper]

Hi all!

I have been wanting to get into Real Estate investing ever since I was a young adult and I had it in my head that I needed to be rich first in order to get started. I recently rediscovered the idea of Equity partners, or a least a financial partner that has the cash and lets me do all the foot-work. I just bought my home in Chattahoochee, FL and the house across the street just went for sale. I'm thinking, "this is a perfect opportunity!" but alas, I am without capital.

My question is this: What type of person do I need to become to attract an equity partner to make deals and do real estate stuff with me? I recently saw a video on no-money real estate investing and I'm really pumped but I also want to be realistic and a good fit for my future real estate partner.

Here's the link to that video if you're curious:

[Don Konipol]

Quote from @Bennie D. Cooper:

Hi all!

I have been wanting to get into Real Estate investing ever since I was a young adult and I had it in my head that I needed to be rich first in order to get started. I recently rediscovered the idea of Equity partners, or a least a financial partner that has the cash and lets me do all the foot-work. I just bought my home in Chattahoochee, FL and the house across the street just went for sale. I'm thinking, "this is a perfect opportunity!" but alas, I am without capital.

My question is this: What type of person do I need to become to attract an equity partner to make deals and do real estate stuff with me? I recently saw a video on no-money real estate investing and I'm really pumped but I also want to be realistic and a good fit for my future real estate partner.

Here's the link to that video if you're curious:

There’s always money available IF
1- The deal (investment) is VERY good, significantly better than the average deal
2- The risk is lower than similar deals with the same investment return
3 - The money partners are able to be totally PASSIVE - because the deal maker (sponsor) is experienced, educated, and honest.

So, there are numerous ways to start, with some having a much greater chance of success than others.  I can only tell you my experience; both personal and observed during my 40 plus years successfully investing in property, notes, and real estate related securities.

First I suggest education.  The BEST would be to obtain a college degree in real estate investment, finance or development.  Of course the time and monetary commitment would eliminate this from serious consideration for many people.  Second best would be a real estate certificate from an accredited college - usually consisting of 3 -4 courses successful completion of which results in the certificate.  While the cost and commitment is significantly less than a college degree, it still represents a significant hurdle for many.
A GREAT alternative is to take the courses leading to a real estate broker or salesman’s license.  These courses will give you a working knowledge of real estate principles, real estate finance and real estate law. The cost should be under $500, and courses can be attended in person or on line.
Next up is experience. Best would be a full time position with a REIT or other company that's purpose is to invest in real estate. Second best would be a position in property management, commercial mortgage financing, or real estate brokerage. Working part time for a private real estate investor, while not the most desirable experience, can still provide the experience, expertise and know how needed to succeed.
Raising investment capital from passive investors is always difficult initially.  Investors look for the “sponsor” to have a track record; so to do so you would probably have to start small, convincing a few friends or acquaintances to provide limited private funds.  As successful deals build under your belt, word spreads and people begin to eagerly await the next offering. 

Alternatively, or additionally, you can attempt to secure ownership of smaller properties utilizing one of the possible “nothing down” strategies.  Problem is that the success of these strategies is pretty rare, despite what some gurus trying to sell you $30k mentorship’s would have you believe.  All the pieces need to fall in place to be able to acquire a decent piece of property with no cash investment.  If you have great credit, and a large credit CAPACITY, this can sometimes be substituted for capital.  While owner financing is often talked about, the investor needs to realize that the two main reasons sellers are willing to owner finance, especially to a buyer with no capital, is (1) the property is impossible to sell otherwise, usually because it loses money every month and the seller can’t figure out how to make it profitable and (2) the seller wants an above market sale price and the only way to get it is to finance a buyer.  Neither situation leads the investor any closer to wealth accumulation, except in rare circumstances of inflationary price increases, and onLy IF he has the ability to subsidize short term loses.