Great real estate investing partnerships combine the expertise and skills needed from the partners, along with the financial backing and the leadership to find projects and get them done – profitably.  The best partners share values of integrity and commitment, people you can rely on.  What are the top 3 ways to build great real estate partnerships?

• Make sure your partners include expertise in all the skills you intend for partners to contribute.  Don’t ever take on a partner (give up equity) that you could instead hire. One of the best partnerships is one where someone with money and no time partners with someone with little money and lots of time. This is where “sweat equity” comes into play and where your most valuable asset…YOU needs to be continually developing. Define the timeline for each step of the process and make sure all parties are fully committed to the task and the timing.  Are your partners flexible if things change or go off-schedule?  Things happen; your partnership needs to adapt and carry on!

• Have a well-structured contract that clearly outlines the financial aspects of the project, as well as who has authority over what areas, and what happens if a partner must withdraw for any reason.  Don’t rely on memories – those can vary surprisingly – and don’t neglect to discuss any aspect of responsibility and tasks up front. The contract should protect all parties, and should outline what steps to take should various adverse conditions occur.

Keep in mind that contracts are needed most not when everything is going well and on target – everyone knows what to do then – but when things go wrong.  Whether problems from outside forces such as weather or market changes or problems from inside the partnership team, the contract should have an outline for resolving changes in the plan and conflicts in the partnership that are threatening the project.  Assume you won’t need those clauses – but be prepared in case you do!

• Conduct yourself to the highest standards, and be confident you have chosen partners who will do the same.  Deliver on your commitments.  Protect your partner’s interests and finances as diligently as you protect those of a family member.  Be the kind of partner you want to have- the kind your partners and others will want on future projects.

You want partners who can be your role models – and you want to be a role model in your own right.  Setting the tone for each other keeps the project moving, resolves problems and leads to the project’s successful, profitable outcome!

Once built, great partnerships are not difficult to sustain – because great partners do their part!  The challenge is getting the great partners together at the beginning.  After that, the work may be hard, the challenges difficult, but great partnerships will weather the storms!

What are some of your favorite strategies … ?

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