A lot people say they need to have a partner in order to run their business. While there are people out there that can make a good partner, you have to be very careful about who you trust with your business. There are a lot of things that can make a partnership go south and when that happens, that usually means big trouble.
I’ve had three partners over the course of my 40 year career in real estate investing and in all three, the partnerships eventually went bad. So bad in fact, that with my first partnership I basically lost everything I had worked for and built. The biggest lesson I learned was that you have to get back in the game, even after a major failure. You’ve only truly failed when you give up.
And a partnership failure can happen to anyone, even the experts. You can structure great deals and build a great business, and all of that can still fall apart if the partnership doesn’t work out.
It’s important to remember that just because you don’t know what you’re doing, that doesn’t mean you need to take on a partner. If you start with smaller deals and gain the experience you need one property at a time, you become more resilient. You will build a business slowly that’s more robust and less likely to fall to pieces just because one of your partners back out.
If you are going into a partnership, there are a few things you need make sure are in place. The first thing is a written contract, you must have everything in writing. It protects you as well as your partner and lays out what everyone involved is responsible for. Make sure everyone is compensated for what they bring to the table and keep the conversation going. Don’t hide if something goes wrong and stay in contact.
The bottom line is if you say you are going to do something, then do it. The same goes for any partners you work with too.