Partnerships Bulletpoof Your USA Real Estate StrategyJuly 15, 2015
Part II of Real Estate Is A Team Sport
Investors who approach real estate as a business and build a team of experts ultimately have the most success over time. Recruiting an “A-Team” of all of the professionals who support the property game is mission critical. It is not possible for anyone to be an expert in all of the various disciplines that are necessary to ensure growth and profit (see the 1 July 2015 blog post, Bulletproof Your USA Real Estate Strategy. Part I of Real Estate Is A Team Sport).
You may already own a number of USA real estate investments and have your initial team in place. When was the last time you picked up the phone to say “hello”? Savvy investors build relationships with their team members and understand that the property game is a relationship business. You have to stay in contact with you team, especially your American property manager.
Having an amazing team will allow you to accelerate your investment journey and grow your US property portfolio. However, there will come a time when you have an opportunity to acquire a new deal but lack the knowledge, skills or capital. Have you considered an investment partner? Partnerships are great because they allow you to accomplish more than you could on your own.
Your portfolio will grow bigger and you will achieve more with partners. Money and expertise (or knowledge) are important in real estate. You may have the time and be willing to put forward the effort to make an opportunity become a reality but lack all of the money or skills to accomplish the goal on your own. When a problem arises and the risk is shared, you will have multiple perspectives on how to best resolve the problem. As the old saying goes, “Two heads are better than one.”
Real estate is a capital-intensive business. Partnerships enable capital formation and risk sharing. Your reasons for investing in property may be different from the reasons of your prospective investing partner. A few reasons why people invest in real estate are: for a short-term gain; long-term cash flow; capital growth and tax benefits. Partnerships are all about vision and you must learn to communicate your vision to your investing partner
Two must have characteristics that a potential property investment partner must possess are 1) shared values and 2) a skill set that is beneficial to the partnership – usually skills that you don’t posses and the partner does.
Investing partners are friends, associates, people you meet networking and get to know over time or people who bring you opportunities. Partnerships are relationships that are built on trust over time. What is important is that you don’t rush in; there should be complementary skills brought by each party to accomplish the goals of the partnership. Ask yourself if you and the potential partner share the same business ethics and values.
Remember that sometimes things do not work out as planned. Partners need to pull together at times, “When the going gets tough, the tough get going.”
Good partners are out there. The quantity and scale of what you can achieve with partners in real estate is truly endless and you can’t achieve the same things by yourself. The goal is to leverage each other’s experience and skills to achieve a larger profit than you could generate on your own. The important ingredients are aligned values, goals and trust in each other.
Do you have a USA real estate investing partner? If not, think about what skills or assets you have and how they will benefit a potential partner. Do you know anyone who you can approach today who would be interested in discussing a joint venture? Start thinking about partnerships now so that when that potential perfect investor presents himself you are ready. Who do you know in your family, friends or professional network who you can ask about teaming up with you to grow you real estate investment portfolio? Pick up the phone and call them.