Human relationships are complicated as they can be. But when a business relationship mixes with personal relationships, things start to get too complicated, even for professional investors. Apart from technical, financial or contractual reasons, these personal reasons can split a well-formed alliance even if the alliance or partnership has been a successful one for years.
These successes in partnerships are very common in the real estate industry. But the number of failed partnerships is still significant. These broken partnerships are directly related to personal issues.
So, how can your personal issues or opinions damage your partnership?
1.Mixing Personal Relations with Professional Relations
I have talked about having your family members or even your spouse involved with you in your real estate venture.
Yes, I still believe it’s a good idea.But sometimes things don’t end up the way you want.
Real estate partnerships area lot like a marriage. You should not commit to it until you are ready.
If the partnership doesn’t work for the obvious reasons, it might leave a scar on you personally.
For example, say you have a situation in hand that needs to be dealt with. Now if you don’t have your business relationship sorted out with your partner, it can be awkward, especially if it’s related to money. That’s why I suggest keeping everything in writing. This way, your personal relationship is protected by legal documents. You won’t have to remind your partners about the awkward situations related to money. The paper will do it for you.
If you want a good buy-&-hold real estate partnership, you’ll have to be in the relationship long enough to see the value go up and the profits pile up.
But this won’t be possible if your personalities aren’t compatible.
Think about this.
You are sharing your room with someone and you want to stay with them under the same roof for years. But one day you realize that the way he leads his life is bothering you. Maybe he is a loud roommate who listens to heavy music all the time and you like classic jazz. Maybe you don’t like his bathroom habit. Maybe his way of partying is completely different. Whatever it is, it’s going to be difficult living with him.
Same for relationships or partnerships with a real estate venture.
If you are relying on someone to get certain things done and make the partnership work, you would want him to somewhat approach you the same way you approach them.
If the other person is completely separated from your definition of an ideal partner, you are going to be in an awkward and unsettling alliance.
And lastly, there is your suspicion and other trust issues that could damage the partnership and your relation.
The problem is severe especially when the partnership is not profiting as you had hoped.
Even if the slow period is due to the economy and the values in the neighborhood, if you don’t trust your partner completely, questions will arise in your mind and you think he’s not doing his part correctly. In the worst case scenario, you might even start blaming your partner for everything. So, to avoid this situation, you must form an alliance or get involved in a partnership only when you have complete faith in the other person.
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