All Forum Posts by: Jaden Griggs

@Jaden Griggs Definitely have a formal partnership agreement with a solid exit strategy in place. I had two failed partnerships where this would have been useful.

The first 1 my spouse and I bought two small apartment buildings totaling 14 units. 2 years in we discovered the partners husband who was the property manager/handy man had been embezzling $10s of thousands of dollars for his wife the partner. It took a court case and about $20,000 in our legal fees to force them to buy us out of the properties but we never got a penny back of the $45,000 in lost rental income they stole.

The second was a restaurant my spouse and I started with another woman and she was supposed to manage it and we were supposed to be the silent money partners. The day before the opening she went home and never returned. My spouse ended up getting the bank and its lawyers to remove her from the mortgage and she lost ownership 3 months later because she abandoned the property.

I see many of the real estate greats from Brandon Turner to Grant Cardone to tons of guests on major podcasts all saying they’ve done loads of partnerships. That the partnerships have allowed them to grow and scale very quickly. Just be sure to have your legal ducks in a row and to make sure you know the background of your partners. If we had done some basic research on either of our partners ahead of time it would have made a huge difference.

 Hey @Jaden Griggs

The main thing I would say is you and your partner need to be on the same page when it comes to exit strategies 

One person can't be focused on by and hold while the other wants to fix and flip. 

Make sure you're aligned now and have the hard conversations now well ahead of time!

Regards

@Jaden Griggs - when I said not putting it all in to the deal, that would be in a perfect world.  Ideally you want to use as little of your own money as possible.  Not for the reason some would think.  I don't mean use other people's money so you don't risk your own.  You've imposed an artificial limit on your investment ability.  You have $25K but other people just in your world or your network alone have literally, millions of dollars.  You have to think beyond deal number one.  Many investors get trapped on their first investment.  Not trapped permanently but temporarily.  If you buy a property using all your $25K when can you buy investment #2?  If it's a flip, from the time you start looking, to finding, to acquiring, to rehabbing to selling...probably 6 months.  But then you have to start the process over again.  You're lucky if you can acquire more than one investment per year with that strategy.  I was able to flip 2 properties and buy 8 rentals in my first year and my partner and I owned 100% of them.  Have you heard of hard money loans?  These are similar.  They're private loans.  High interest loans.  They have a lien on the property.  You use their money to buy, rehab and either flip or keep as a rental.  If you flip, you pay them back when you sell the property and keep the profits.  If you keep as a rental, you refi and pay them back that way.  The private lender gets points up front and a certain number of guaranteed high interest monthly loan payments.  I just replied to your message as well.

 Thanks you for sharing! Yes we will have boots on the ground in the market that we will invest in. I'm considering partnering on my first deal and starting off with something more affordable to get my feet wet with and go from there. Thank you for advising not to put all $25k into my first deal and can I ask you why? Is it because it would lock up a lot of my capital? Also, I was unfamiliar with the interest only loans until you mentioned it. How does that work?

@Jaden Griggs - Do you know anyone here in the US?  Having "boots on the ground" is crucial to success, especially early on.  I've partnered on all my deals since I started 10 years ago.  I'm closing in on 200 rentals.  In the beginning my partner (brother in law) was in charge of finding private investors.  Along the way I found my fair share as well (my realtor, my attorney, my bank teller, my realtor's friend, neighbor....all invested with us).  We'd do high interest only loans and pay them back as we rehabbed, refinanced and kept our properties.  As deals got larger we'd bring investors in as equity partners.  We started with $60K properties and our recent acquisitions have been $5M+.  I would not suggest putting all $25K of your money into your first deal.  

hi @Jaden Griggs - you should be able to look up property ownership info if you go through the county records, most of them should be online. 

Alternatively, you could spring for a few $$$ and pay for any numerous data sourcing companies such as propertyshark, propstream, etc.