The 10X Effect Of Partnerships

Lately I have been thinking a lot about the power of partners.

Life partners. Business partners.

Action movies have fighter pilots and police who would die for their partners.

Then, in a syndication, we have the General Partner and the Limited Partner. Those are sort of dry legal terms. To accurately describe their roles, we usually say something more informal...

Like Sponsor and Passive Investor.

Of course there are other important players -- the Property Manager, the Broker, the Attorney.

Yet it all comes down to the GP and LP. And this is when I think it’s very helpful to go back to the word Partner.

But not in the legal sense.

A partnership is a relationship where both parties get exponentially more working together than if you just added their individual efforts. You don’t just share profits, you save a ton of time and energy because each partner focuses on their strengths. You can specialize AND get the enjoyment of working as part of a team.

Who Does What In A Syndicate?

• The GP/sponsor is typically a group of people or companies working together that each bring something of value to the table (eg. capital, experience, large balance sheet, active audience, etc).

• The LPs/investors, on the other hand, are looking to create, preserve, and grow their wealth. And their main responsibility is to contribute capital.

It gets even more interesting when we involve co-syndicators (more General Partners).

Rather than limiting our investors to just the deals we negotiate, we’re cultivating relationships with a select group of successful sponsors in other strong markets. And that allows us and our investors to access a greater number of truly good deals.

So, in closing, I’d just like to say how thankful I am for the power created in a great partnership.

Working together, we’re on a future-oriented journey based on trust, comfort, and the shared goal of building wealth for our families.