Finding a business partner has become synonymous with a very polarizing range of emotions. On the one hand, a great real estate business partnership can elevate just about any investor’s career to the next level; however, that’s provided you take the appropriate steps. For better or for worse, finding a business partner can also result in a lot of anxiety, given the potential ramifications of your impending choice. I am convinced, however, that you can’t have one without the other. Finding a business partner is a very important step, and shouldn’t be looked upon lightly. That said, working with the right business partner is one of the best decisions you will ever make.
No matter how talented you are at flipping properties or finding deals, you will almost certainly find yourself to be at a significant disadvantage if you are incapable of working with others. If for nothing else, real estate is a people business. Those you work with on a daily basis are essentially your most valuable asset as a real estate investor. Nothing else, at least that I am aware of, has the potential to contribute to an investment business than qualified, competent people, and finding a business partner is no exception. Provided you take the appropriate steps, finding a business partner can very easily be the best decision you ever make as an investor.
Having said that, the first step in finding a business partner that can help you bring your business to the next level is knowing what to look for. Let’s take a quick look at what I consider to be the most important attributes of the perfect real estate business partner.
The real estate industry is full of smart individuals that have made a name for themselves doing what they do best. It is important to note, however, that finding a great business partner doesn’t necessarily mean identifying the most objectively perfect candidate. While skill level, knowledge, and previous success are all indicative of a qualified candidate, they are by no means the end-all be-all. I am convinced that the best business partner is the one that meets an entirely different set of criteria: Instead of looking for someone that is objectively better than everyone else, I recommend finding a business partner that compliments your current attributes.
You don’t necessarily need a real estate partner that is great at flipping houses if you have already checked that box yourself. Instead, it’s more important to find a business partner that is capable of checking the boxes you have yet to check yourself. After all, this is a partnership we are talking about here; each party should be able to contribute to the success of the company in their own unique way. Conversely, two partners that share the same skills — no matter how good they are — will most likely fall flat in subsequent areas. Neglecting complimentary skill-sets will essentially prevent event the savviest investors from running a well-rounded company. And what is real estate investing if not an extensive career that requires an in-depth knowledge of several exit strategies? Take it from me, the more versatile a real estate business partnership is, the better off it will be.
Having said that, finding a business partner has less to do with finding the more qualified candidate and more to do with finding the most complementary candidate. Have I lost you yet? Quite simply, it is more important to find someone that compliments your particular skill-sets than to enlist the services of the most successful investor you have crossed paths with. First and foremost, find a partner that can do the things you can’t; any overlapping attributes should be seen as icing on the cake.
While less tangible than the skills a respective partner may bring to the table, it is absolutely imperative to work with someone that shares the same goals and aspirations as you. If for nothing else, even a slight difference in opinion regarding the goals of a company may create a schism between business partners. In fact, I’d go as far as saying that you shouldn’t partner with an investor that doesn’t share the same goals as you. While there are obvious exceptions, it is important that partners are on the same level working towards the same goal. Not only will common goals focus efforts and facilitate a more productive environment, but they will simultaneously mitigate the risk of complications arising in the future.
Outside of the actual goals and skill-sets a respective partner can bring to the table, it is important that each party communicates well. At the very least, the best investor in the world will be useless as a partner if they can’t communicate their intentions or even feelings towards a specific topic. Again, real estate is a people business; the sooner you come to terms with that, the sooner you will recognize the importance of communication.
Not surprisingly, communication needs to transcend the workplace. The best real estate business partnerships, for that matter, will exhibit an exceptional level of communication, both in the field and out of the office.
Important discussion will inevitably take place in the field of real estate investing. Whether it is dealing with a client or a subjective cosmetic upgrade to a home, partners need to be able to communicate if they ever hope to get anywhere. Neglecting to communicate in a manner that facilitates progression is harmful to any business and can detract from your bottom line in more ways than one.
According to Amanda Neville at Forbes, “If one person wants to talk it all out, and the other person just wants to move on without processing, it’s going to be tough to get through the kinds of conversations you need to have as business partners.”
Communication is key, and the partners that realize that are the ones that will go the farthest in this industry. That said, be sure that you include communication in your criteria when finding a business partner.
Finding a business partner in the real estate industry, not unlike any other field, will require a lot of work upfront. Instead of trusting your gut, as far too many tend to do, you really need to take more analytical approach and mind due diligence. Any steps taken towards finding a real estate business partner need to be met with an acute attention to detail. That said, if you take the right steps, you will most likely be rewarded accordingly. Putting in the time to vet the right partner could result in the best decision you ever make as an investor.