One of the fundamental lessons we’re taught in kindergarten is that of teamwork. Teamwork isn’t something that everyone enjoys, but in life, it’s very necessary. For real estate investors, it can be essential. There are plenty of sayings, books and poems that go back to a single, central idea: two are better than one.
From “no man is an island” to heartwarming tales of individuals joining together for a like cause, teamwork is everywhere. We eat up sports movies and instill these ideas into our children.
So why do so many of us ignore the notion of collaboration in our professional lives?
Too often we try to do things by ourselves. Sharing credit and profits, after all, doesn’t appeal to most people. But collaboration, more than anything, can positively shape your success in real estate investment.
Real estate investors flooded the market when the housing bubble took its toll. At the time, there were plenty of properties to be snatched up — but soon, that wasn’t the case. Some investors felt pushed out of the market, especially where things got competitive.
Surprisingly, rather than turning real estate investment into a survival-of-the-fittest situation, savvy investors and develops defied expectations and started to collaborate.
“Allied capital” is a strategy that could serve real estate investors very well. Why?
It combines multiple viewpoints, experiences and resources to make more informed decisions.
It builds relationships that can lead to new connections, deals and business opportunities.
Risk is diluted with multiple investors. This can also give investors the capacity they need to diversify.
Rather than create competition, you open yourself up to future collaboration and benefits.
Who Should I Collaborate With?
Investors That Share Your Overall Vision
All investors have different approaches and perspectives to the business. Still, you can find like-minded individuals in terms of overall goals. If you’re on the same page at a fundamental level, differences will add perspective rather than create problems. While there will be challenges in any collaborative setting, being able to go back to a common ground will mitigate conflict and keep everyone anchored.
Investors That You Can Trust & Respect
If you wouldn’t want your name associated with a particular real estate investor, collaboration is likely not a good idea. If you can’t trust or respect them, don’t work with them. Not only will this prevent you from getting burned in the end, but it will save you a lot of conflict, resentment and stress — and safeguard your reputation.
Have you taken an “allied capital” approach with your real estate investments? Share your experience with us in the comments.