@Reid Ervin
Great questions—there's a lot to unpack here, but I'll share what I've learned from my own experience, especially from a flip turned BRRRR, that I partnered on last year in Longmont CO. It worked out well, but not without its challenges, and I learned a ton along the way.
How to find a partner:
Meetups and forums like this are great places to start. I’ve met most of my partners through in-person events because it’s easier to get a feel for someone’s personality and long-term vision. That said, don’t underestimate the power of building relationships before you pitch a deal. Even with a great opportunity, trust is the foundation of any partnership.
In my partnership, we had already worked together on multiple deals—me as the agent and him as the investor buyer—so we had established a strong foundation of trust. We both knew we were aligned in our goals and had a clear understanding of our respective roles in the deal from the outset.
If seller financing is part of the equation, look for someone who’s not only experienced with creative financing but also understands how to manage the potential risks involved. Share your goals openly and look for alignment—it’s better to take time finding the right partner than to rush into something that doesn’t click.
Vetting Potential Partners:
When you find a potential partner, ask questions like:
- What’s your investing experience?
- How do you handle challenges in a deal (unexpected costs, market shifts, etc.)?
- What’s your communication style and preferred level of involvement with this deal?
Red flags for me include people who are overly optimistic without considering risks or those who don’t seem to have a clear plan for their contributions to the partnership. During my Longmont deal, I realized how important it was to have someone who not only brought resources to the table but also shared the workload and decision-making.
Structuring the Deal:
For this large of a deal and any deal in general, transparency is key. Make sure both parties fully understand and agree on:
- How profits/losses will be split
- Who is responsible for what (e.g., repairs, management, communication with the seller).
- Exit strategies in case things don’t go as planned.
When you do find the right partner make sure to create a joint venture agreement that outlines all of this clearly. In my Longmont flip, we made sure to account for worst-case scenarios upfront so there were no surprises later. Not to raise any fear or negativity but in real estate it’s best to plan for the worst and hope for the best!
Final Thoughts:
If the deal is really solid, raising the money will be the easy part—capital always flows to good opportunities. The challenge is finding a partner who shares your vision and is willing to put in the work to make it a win-win situation. Take your time, build the relationship first, and don’t hesitate to walk away if things don’t feel right. It’s much better to take it slow than to partner with someone who isn’t the right fit.
Good luck on this one, it sounds like a great opportunity!
