Real estate investing is very lucrative. However, it is also extremely expensive. So, for most people, the only option they have to prosper through property investment is by partnering. For it to work well, all partners must understand each other’s goals very well. You also need to clearly outline your expectations and what each person’s role will be in the partnership. From my personal experience, here are some tips you can consider to make partnering in real estate work.
- Communication: Regular meetings are very important for progress to be made. Try to meet at least twice a week. Discuss your goals, expectations, and all concerns you may have. Decision-making should be swift, and where there is a stalemate, have a workable way forward that will still enable you to progress. To be honest, not everyone will always agree with everything on the table. In that case, have mechanisms in place on how you will progress despite the lack of total agreement.
- Define roles and responsibilities: They say 80% of the work is usually done by 20% of the people. In all my groupings, I am yet to find this principle contradicted. However, this can cause fatigue, disillusionment and eventually loss of focus on your goals. To mitigate this, do the following:
- Have a clear overall leader or a chairperson.
- Clearly define each partner’s role and responsibilities in the partnership. This can help prevent confusion or conflicts down the line.
- If you are the “doer” make peace with the fact that you are going to do most of the work and so do not let resentment build, have your sight on the goal, and create some form of compensation for the extra time you put in.
- For the “lazy” people in the group, appreciate the efforts of the ones who are always running around. And do not vilify them for any mistakes, but take it as a collective responsibility. In any case if you were the one working, you might have made the same or worse mistakes.
- Complementary skills: Look for partners who bring complementary skills and expertise to the table. Having members from different sectors like law, HR, Real estate, finance, technology, insurance, will enable you to save on money you could have spent hiring for those skills. This can help ensure that all aspects of the real estate project are covered, and increase the chances of success.
- Shared vision: I don’t know how to emphasize this enough. Please, confirm that all partners share a common vision for the project. Make sure to discuss your goals, activities, and timelines upfront, and ensure that everyone is on the same page.
- Written agreement: Consider drafting a written partnership agreement that outlines the terms of the partnership, including each partner’s responsibilities, profit sharing, and dispute resolution processes. This should be at the beginning and may be amended annually. Everybody would love to have a little more money in their pocket. Be clear on how and when partners expect to have a payout, and let everyone be on the same page.
Overall, partnering in real estate can be a great way to pool resources, share expertise, and increase the chances of success. But it’s important to approach the partnership with clear communication, defined roles, and a shared vision for the project.
