Good partnerships aren’t made at the first attempt. It’s like a new recipe. You need to test and try a lot of combinations to finally get what you want. That being said, there are some common things you should do to ensure the best chances for a successful partnership.
1. Common Aim
Having a common goal or aim is crucial and a “must” as some would like to point out. If you and your partners don’t align the goals, running things will be difficult and unfruitful.
Also, all the partners in a partnership must ensure they can invest the time and resources to work on their aim.
Maybe you want to focus on making a good net worth or perhaps you want steady cash flow, no matter what your target is, your partner should be on board with you.
However, having the same goals or aims doesn’t mean both you and your partner should have a similar skill set. I mean, if you and your partner both offer the same skills and talent to the venture, you’ll have a lot of places where your partnership might fail. That’s why it is important that you and your partners’ skills are complimentary.
If you are offering something to the partnership, make sure your partners are offering something new, unique, and useful. Only then can your partnership reach its maximum potential and achieve your goals.
2. Preset Roles for everyone
Another important thing to look for in a partnership is preset roles for everyone.
It is better to have a clear idea on what each individual’s role would be in advance, otherwise, you’ll have to push one another to get things done.
If the partnership is small, like 2 parties only – each party or partner can take several roles. Like you can act as the landlord and collect rents besides looking for new deals to invest in while your partner can handle the legal stuff and oversee or manage everything else.
3. Planned Exit Strategies
Like bank heists in movies, you need to have an exit plan before you get involved in a real estate partnership. Like your goals, the exit plan should also be the same for the situations when you or/and your partner both need to exit.
Let me give you an example – while back, a friend of mine and one of his partners purchased a property at a decent price. But after some time, they realized that they won’t be able to make a good profit with this place considering how much the maintenance costs were. So, they decided to sell it as quickly as possible while one of the partners insisted to hold it until the price went up. At that point, one even suggested that they rent the place for a while because they really needed a steady cash flow at that time. But the other still wanted to keep it idle unless they got a deal that was too sweet to pass. Eventually, they didn’t partner on any more deals because by then, they both figured out that their exit strategies didn’t match. So, if your partners don’t have an exit plan compatible with your own; don’t partner with them.
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