I wrote about how to find a partner a while back. There were a lot of reads to it and when I went back to it, I realized I had left out a lot of specifics. So, here’s how to find a partner for your real estate deal.
First, you need to ask yourself whether you should find a partner. There are reasons to do it and to avoid it. Have a read of my previous post on the subject first. Then come back. This post is all about finding one once you have decided you need one. This is all about people. But there is no eHarmony for real estate partners – at least not one that I know, or would use. You’ve got to be able to talk to people and that usually sucks. Sorry. But it gets better with practice.
How to Find a Partner
- Start Right Away. To start with – this is hard. You’ve got to talk to people. You’ve got to talk about yourself. You’ve got to learn about them. This takes a bunch of time. Don’t start this the day you get your deal under contract. You’ll most likely fail to find a partner and lose the deal. You should take a year to really learn about someone and decide if they are a good fit for you.
- Meet People. You will need to go to meetups for this. Ever been speed dating? Me neither. But I bet it could work. You get in front of someone for what is hopefully a casual conversation with no expectations. Maybe you hit it off, maybe not, but you go for the economy of scale. You talk to a bunch of people in a ‘safe’ place. First, go to your local real estate investment groups. Do a web search for real estate investment group [your city]. They are often listed on Facebook as well. Real estate conferences are also a good resource. I’m not going to endorse any specific one, but you can do a web search for real estate investment conference and see a massive number. You can also join online social investment groups like those on Facebook, Instagram, and Bigger Pockets. Once you are at a meeting, just meet people. Introduce yourself. They are bound to ask you what type of deals you are looking for. Don’t be afraid to tell them you are a virgin. Honesty is the right thing. Play to your strengths, like all the knowledge you’ve gained from reading multifamily books. No need to brag, just be yourself. You can do this over zoom with a partner in Alaska, but like real dating, all the fun stuff happens in person. Local is best. A local partner is more likely to take an interest in your deal.
- Make it Organic. You wouldn’t say, “I’m looking for a hot date that might lead to bedtime shenanigans.” Well, maybe you are into Irish people and you would, but I wouldn’t. Best not to lead with “I’m looking for a partner in my deal.” Many will hear alarms that you are only looking for one thing – to scam them. People only invest with whom they trust, and a post on a web forum is not going to build that. Trust comes from knowing others and you have to spend time with them to build that. Talk about your interests and let them talk about theirs. And just like your serious girl/boyfriend, you are looking to take a major step at some point, which is why joining a partnership is sometimes likened to marriage. You don’t want a costly divorce in the future. Make sure you both have the same real estate interests and goals. Determine who brings the money, time, and knowledge.
- Set Appropriate Expectations. You both want to know what the other is looking for. If you don’t match – the date is doomed. Now’s not the time to keep it a secret out of fear of coming on too strong. Determine who will do what in the business. Write it down. Who is bringing the money? Who is doing the work? What 3rd parties will you bring on to help? Take the time up front to discuss this. Failing to do it is the root cause of most failures in partnerships and marriages.
- A Note on Family and Friends. This is controversial. Well, the real estate partner part. Those who are opposed to this worry that a bad experience could sour the friendship or hurt the family. That’s true. So you need to set your expectations up front – like we said in #4. Best to avoid family and friends unless you are really sure.
- Consummate the Deal. Only now is the time to put pen to paper and get the deal done. A lot of work? You bet. But worth it in the end. So go out there and find that partner!
And don’t forget to use protection – a solid contract made by a lawyer!
