Why Most Partnerships Don’t Work, and the Few that Do

[Don Konipol]

Most partnerships DON’T work because the partners go into the partnership for the WRONG reasons.  Partnering between two people both with no or limited experience; both with no or limited capital, or because they’re “good friends” and want an adventure together, will ultimately result not only in the failure of the partnership, but often in long term bitter feeling of blame and hostility between the ex partners.

The partnerships that are successfully, both financially and socially, have most of these characteristics

1- the  parties bring complimentary attributes to the partnership

2- the parties are of a like mind concerning ethics

3- the parties view risk - return the same way

4- the parties goals are aligned

5- the parties RESPECT one another 

6- the parties are willing to defer to the other partner in that partner’s area of expertise

7- neither party is under undo financial pressure

8- each partner’s “significant other” is supportive of the partnership

9- the partners have an agreed plan in case of death or incapacity of one partner

10 - the partners have a legal, executed buyout plan in case one or both parties want to terminate the partnership

If you’re considering going into a real estate, or any business partnership, you may want to consider the above and take a hard look at the chances of success.  The “high” felt by the excitement of beginning a new business adventure lasts only a limited amount of time.  The reality of failed deals, broken pipes, deadbeat tenants, and loan turndowns (also know as REALITY) very quickly bring the partners back into the realization that investing for profit is hard work 

[Joe Villeneuve]

There are three reasons, and ONLY three reasons to form a partnership.  If your partnership isn't formed because of the following three reasons, it will fail.

1 - Your partner must be able to do something you "can't do".

2 - Your partner must be able to do something you "don't want to do".  If you don't want to do something, you won't do it well, so have someone else do it.

3 - Your partner does something you "shouldn't do".  Just because you can do something, doesn't mean you should.