Benefits Of Having A Partnership

Human hand drawing partnership puzzle on the whiteboard

Is a Partnership Right For You?

There may be more horror stories about ex-business partners than about ex-spouses, and taking on a partner in some ways are more dangerous; especially when you consider the U.S. divorce rate is more than %50. Friendships have been ruined and families torn apart by well-intentioned business plans. However, this doesn’t mean that partnerships are necessarily a bad idea. Who knows how many potentially successful partnerships never happened because of the fear induced by these stories?

Partners can bring cash to the table if you don’t have enough, they share the risk on a venture and can also provide mentoring or advice. A good partner should be someone that can bring something to the deal that you don’t already have. If you and your partner have experience but no money, you will both be stuck. If you both have money but no idea what you’re doing, I guarantee it will get messy.

Having a perfect match doesn’t necessarily mean you will be successful. There are actual benefits to teaming up, but there are some multiple things to consider before you partner with someone on a real estate investment.

Proceed with caution.

Partnerships in real estate investing are like any other business undertaking, and should be treated as such. This is even more important to consider when potentially partnering with friends or family.

Before entering a partnership on a real estate investment opportunity, you should always ask yourself, “Why am I doing this?” If this is not easily identifiable, tangible benefit to investing with a partner versus investing on your own, then maybe adding a partner is not the best plan. Or at least not right now.

Do not start a partnership off the wrong way. Make sure the arrangement is well planned and includes an operating agreement to detail the roles and responsibilities, capital contributions, and profit splits. It should also include those things you likely do not want to talk about like what happens when the partnership ends (either by choice or death).

Choose your battles.

As in any relationship, there will be disagreements and there must be compromises. If you are the type of person who needs to have their way in every situation, you should probably stick to investing on your own, because that is not the kind of partner most people want.

Don’t be cruel.

You know what I mean. Always uphold a line of complete professionalism. It is always best to keep things in this manner to avoid any misconceptions.

Consider accountability.
Having someone to be accountable to, other than yourself, can make a substantial difference in your venture. Like someone who is on a new diet or exercise plan often have workout buddies to help make sure they stay on track. When life gets in the way and things get tricky, it’s human nature to slack off, but like a workout buddy, business partners help keep each other focused. When you’re operating solo, it would be very easy to let life slow you down, pulling you away from your investing responsibilities. However, having a business partner keeps the business on course because you do not want to disappoint the other person.

Expands your Network.
The importance of networking is essentially priceless, especially in a new business, and it becomes much easier when you have more than one person spreading the word. Additionally, each partner already knows people who could end up playing a part in your business, either as a team member, lender, client or contractor.

Boost in Confidence.
Getting started in real estate investing can be intimidating and over-whelming, especially for someone who has little experience in business or being an entrepreneur. When challenges arise, it is natural for doubt to creep in and leave yourself wondering if your pursuit of real estate investing is the right thing for you both personally and professionally, but having a partner to re-assure you can be revitalizing and keep you motivated.

Communication is Key.

Talk.  Every single day when possible. A lot can happen in a one day and both parties need to be aware of what is transpiring with the other partner. Discussing daily events and future goals help keep the relationship growing and validates the reason you teamed up to begin with. Having someone else to discuss property analysis with doesn’t hurt either. There are hundreds of considerations when working on that first real estate deal, so having someone check your analysis and weigh in with their professional opinion greatly increases your odds of getting it right.


There are a host of reasons to invest with a partner, but it’s imperative to always understand your risk. While it may seem appealing to invest with family members or friends, investments do not always perform as expected, and all members of a partnership need to be aware of and be prepared for this kind of situation from the start.

Just as it’s important to research the markets and properties you plan to invest in, the same is true of entering an investment partnership. You are risking more than just your money. Choose wisely. Choose a business partner that will treat you fairly and has goals like yours. Troy makes sure to invest his time wisely with anyone he partners with. Carefully plan the arrangement and constantly communicate. If both partners remain committed to the business, you will likely develop one that is prosperous for all parties involved.