For real estate investors, a partner can be a valuable asset. Even if you’re not in need of a financial boost—often a reason investors seek out an investment partner—as the old adage says, two heads are better than one! A partner can help you pool resources. Not just financial, but in terms of strategies, connections, leads, and opportunities that you might not have awareness or access to by yourself.
But not every partner is a winner! Some might not carry their weight, have the right chemistry with you, or be on the level they need to be. You want a partner that is in a place that is mutually beneficial—not where one partner is pulling all of the weight.
If you want to be sure you’re making the right choices in finding a real estate investment partner, you have to ask the right questions.
This checklist will help you make sure you’re doing just that!
11 Questions to Ask Your Future Real Estate Investment Business Partners
1) What is your current financial situation?
This is an encompassing question. It’s not as simple as what’s your salary? It can be an uncomfortable question, but it’s something you need to know. Are they caught up in paying alimony? Do they have large outstanding debts? What are their other investment commitments? Pay attention to red flags—are they unwilling to share details with you? Do they have delusions about investing on a too-small salary? Get all of the details!
2) Why are you pursuing this?
What’s the motivation behind the partnership? Are they excited about working with you? Do they have ambition, or do they just see it as a fun thing they want to try, but don’t really care about one way or another? You need to know that your business partner is as invested in the success of your venture as you are.
3) How do you work under pressure?
While it’s easy to say you’re great under pressure, they best thing you can really look to is someone’s track record. Ask for examples. Give a scenario and ask what they would do. You want to know that they aren’t going to crack or make bad decisions when the going gets tough.
4) What are your expectations for this investment?
You need to know that your partner has realistic expectations and that you’re looking for similar things. Just be on the same page! If you’re tracking on a similar path, you can ensure you’re going to be working together, not against each other.
5) What unique advantages do you bring to the table?
Is your partner going to bring skills and advantages that enhance your own skillset, or are they just going to be redundant? You want a partner that widens your net of contacts and abilities. You also want a partner that’s good at marketing themselves. So let them give you a pitch.
6) How much time do you plan to commit to this venture?
The last thing you want in a partnership is one party giving 100% while the other puts their feet up and gives, well. Not much of anything. Get an understanding of how much time your partner can and plans to invest in your partnership—just so you know what to expect and so no one ends up resentful.
7) What do you value most?
You need to know what your partner values. Integrity, honesty, hard work...you want to be sure your partner isn’t going to be the type to slack and cut corners for a quick buck. You don’t want to end up saddled with a scammer!
8) What is your reputation in your community?
While you can’t ask this one so directly and get an answer of value, it’s one you should ask...through research. Look into your potential partners! Investigate and see what you can find of their reputation online or otherwise. They will reveal valuable insights.
9) How do you see profits being divided?
Definitely something you’ll want to know. Will you have a set plan, or will it be based on how much money you put up for each individual investment? What if one of you is putting more time into your investments? It’s definitely something you’ll want to address—it’s not so cut-and-dried.
10) What happens if things go awry?
Sometimes partnerships don’t work out. While no one wants to think about disaster at the very beginning, you do want to consider how to weather storms—and even the dissolving of your partnership—just so you don’t wind up in legal issues or drawn out battles down the line. Ask.
11) Are you willing to put this all in writing?
Partnerships aren’t made with a handshake anymore. Get it all down on paper! It helps you start seeing issues that need addressing, and all the areas you need to cover. It helps solidify your partnership in a real way.
A Different Kind of Partner…
Want a partner who is vested in your success as a real estate investor? What about a turnkey investment company? In a way, they are your partners! Working to secure incredible turnkey properties, management, and tenants so that you can be a successful passive real estate investor.
Lean on our expertise and let us be your partner in real estate investment success.