Is Partnering a Death Trap??

Question

Hi
I came across a lead recently that is outside my area, about 4hrs away. It's a great wholesale deal and I've contacted investors in that area to see if they would be interested in parnterning 50/50...all said yes. Is it a good idea to do it? If I do, how do I handle everything? I've heard stories of investors partnering only to get burned. Anyone have any experience with a 50/50 split?
Thanks

John Thein

E. Jacobs · Answer

Are you saying you want a partner to wholesale the property to another investor or are you buying a wholesale property to flip to a retail buyer? I'm guessing the first since it's in the wholesaling forum, so how big of a fee do you plan on earning for this property? Have you had an offer accepted? I would guess you can pay someone local an hourly wage to show the property to investors for you. You could pay a nice amount to make sure they do a good job and still save thousands by doing that instead of splitting the assignment fee. You can also ask them to take some pictures or video footage if you're wondering about the condition of the house. If you're trying to flip to an end-buyer, I would say this is a whole different story. As said above, make sure everything is written out very clearly and you know who is supposed to do what and when. How would you finance the deal? Who would handle the PITI payments during your turnaround time and how will you produce a retail buyer?

Lar Real · Answer

well you should got to know partner better... don't trust people whom you don't know.

Brian Haskins · Answer

Just make sure you fill out the appropriate paperwork.

Brian Haskins

J Scott · Answer

As workerdrone pointed out, why are you looking to partner on this deal as opposed to just wholesaling it to another investor?

If the property is 4 hours away, are you really going to want to drive a couple times a week to check up on your investment, as you aren't likely going to trust a new partner who you don't even know.

Wholesale, take your profits, and move on...

John Thein · Answer

I have a wholesale deal that is 4hrs away...so its not cost effective for me to drive back and forth. Need someone to walk thru the property and meet with buyers.

Timothy W. · Answer

The question is not whether partnering is good or bad, the question is if they are good partners.

Shanti S. · Answer

Partnering can be great if you otherwise could not do the deal.
                              
                              Discuss everything beforehand - what are your goals and expectations, what are your concerns, what will the profit and investment split be, how will you handle it if one of you wants out of the deal earlier than agreed, who will be handling what investment activities, etc.  Once you're sure you are on the same page, put it in WRITING in something like a joint venture agreement and sign it together with a witness - you may want to have an attorney do this for you.
                              
                              I am in a deal with a partner right now, we take turns covering meetings and phone calls when the other does not have the time.  We have shared Google docs for recordkeeping so they're always accessible and can be updated by either partner.
                              
                              Neither of us could have done the deal alone so it's a win/win as long as we communicate well and have the same goals.  The written agreement protects both of us if there is any kind of falling out or conflict.
                              
                              Why do you feel you need a partner for a wholesale?