Julie's parents aren't willing to take on partners, and they acknowledge that this has slowed down their wealth creation. They made the choice consciously but they've missed out on great deals because they weren't willing to work with a partner on the deal.

On the other hand, we've expanded our wealth rapidly thanks to great partnerships but we've also experienced a lot more stress, surprises and drama than we would have without partners.

People like to make partnerships more complicated than they need to be. If you keep things simple it will be easier for everyone. There are also a few other things you can do to minimize  the potential pitfalls of partnerships:

1.  Before you get involved communicate a lot ... and just when you think you've communicated too much ... communicate some more! And a big part of communicating is listening. Listen carefully to your prospective partner. Ask questions. Understand their objectives and their needs. Make sure you're going to be able to meet their needs. Focus on what you're bringing to the table. Make sure it's at least equal to what they are bringing to the table ... preferably greater than what they are bringing to the table so they feel confident that they are getting a great deal.

2.  Always be accountable. Recently we almost lost two really great rental property deals because our partner had less money to contribute than we had expected. We felt we had two choices ... be bitter and lose the deals or be productive and save them. It literally took 100+ hours and it pretty much consumed our summer vacation but we saved the deals. And we are fixing the leaks in our process and learning from what went wrong.

We aren't victims of anyone's actions. And when you don't accept the victim role you can keep control of the situation. And that is what we did. We accepted the fact that we had not done a good job of communicating, realized that we contributed to the disaster, and took the yucky tasting medicine.

If you are always accountable for what goes wrong in a partnership, you will be able to handle just about any of the pitfalls.

3.  Have a clear and fair joint venture agreement created by a lawyer: And of course, follow up that accountability with a solid and fair joint venture agreement that lays everything out clearly for all parties involved. There's nothing wrong with covering your butt!

If partnerships are not the way you want to grow your business then you're definitely going to want to check out our teleseminar with Nick Cifonie.
 
http://revnyou.com/Real_Estate_Investing_Techniques.html

Published on September 18, 2009

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