So you have been hanging on to a few properties a little longer than expected. Your wholesaler calls you with the deal of a lifetime. Easy flip, fast remodel, easy sell, six figure potential profit. You wipe away the drool and soon realize that you have too much capital tied up in other places. If you only had someone to take on a portion of the cost, you could move on this gem, but who to call?
Keep a list of potential real estate investment partners
Taking on a real estate investment partner can be tricky and if done poorly, can lead to litigation, not profits. You should always have a list of people that you know in the industry who would be acceptable partners to bring into a deal. This list can be long or short, but they need to be reliable people that will uphold their end of a deal. You can go two routes. You can bring in a relatively new investor who will accept teaching and do the job your way. This takes more time, as you will be required to be onsite more and keep a close eye on your budding protégé. However, they often will reward your teaching with future deals in payment for the education. The other option is a veteran. This is a great option if you need someone who can take over the job site. If your time is limited this is the best option. Make sure you know their track record and have seen some jobs they have completed. Also, make sure you share the same vision for the property. If he wants a rental and you want a quick flip, there could be trouble at the end of the rainbow.
Flush out the details
Make sure the details of the deal are outlined before jumping into the property. Both real estate investors should be on the same page and there should definitely be something in writing. You need to clearly state who is paying for what and what will the final split of the profits be. 50-50 is already the best route to go, but not everything is always that simple so make sure you come to a fair deal for both of you.
Delegate the workload
Aside from the money, you need to determine who is handling what jobs. If you are splitting the workload on the renovation, there needs to be a clear definition of the duties. You also need to be sure that there is one concise plan in place so that you don’t end up with a mix-matched property only fit for two-face. Be sure you both know who is doing what and what the end goal should look like.
Remember to stay friendly. If someone continually gets heated and temperamental, nothing will get done. Having two people on a renovation should make things easier, not harder. When you find the right person to work with, it will allow you to do more with less and you won’t be missing out on any of those sweet deals.