Need Private Money? Consider Partnering Up

As a real estate investor, it’s easy to get caught being a lone wolf. You have to look out for ‘number one’ in business at all times. Somebody always has their hand reaching for your wallet. However, it’s dangerous to become short sighted. After a few deals, it’s easy to think that you and only you have all the answers. Sometimes it helps to look outside and tap into someone else’s resources.

Partnering can be a great way to raise private money. You bring the deal and the expertise and partner up with another real estate investor who has access to private investors. While you may have to split up the profits, keep in mind that it’s always better to have a small piece of something big than a big piece of something small.

Partnering provides three important benefits to raising money. You can broaden your reach of private investors, have access to more deals and have a greater success rate closing the private investor. If you are long on experience but short on dough, consider the following:

Partnering Advantage #1: You Can Broaden Your Reach

You can broaden the reach to private investors and offer your opportunity to people you would not have had access to before. New real estate investors may have extensive contacts – but they won’t know how to approach them or set up deals. This is where you come in. You can propose a partnership arrangement where they bring the investor and receive a piece of the deal in exchange.

Partnering Advantage #2: Access to More Deals

If you partner with another real estate investor, you’ll have access to more deals. How? Because your partner can be charged with scouting or bird dogging deals, which give you another set of eyes on the market. Your partner can locate properties that fit your criteria and you can then see if the numbers work to bring in a private investor. If the numbers work, you put the deal together and move ahead. Your partner can also go forth into the marketplace and build relationships with agent and brokers to drum up interest in working with your company.

Partnering Advantage #3: Greater Success in Closing the Investor

Because you’re going in recommended by your partner, you immediately have an advantage in presenting the deal. You aren’t going in “cold.” Your partner can lay the groundwork for you ahead of meeting with the investors(s). They can qualify them, prep them and even book the time and location for the meeting.

Partnering can be a win-win-win situation all the way around. The private investor wins by having access to a great investment opportunity. Your partner wins because they get to ride along and learn first hand how to set up and implement a private money deal and YOU win because you get access to the money and another deal that puts cash in your pocket.

The best thing about real estate investing is the unlimited creativity with which you can do deals. Slice and dice it until the different parts come together and make sense for everyone. Be sure to have your legal paperwork in order and a formal partnership arrangement. You don’t want things to go sideways because of a legal misunderstanding.