I see a lot of people seem to work in partnership in the business? What are the pros and cons of such?
With the right partner, I see many pros, not as many cons. Agree?
Partnerships are like marriages; good ones are fantastic and bad ones are horrible. The best partnership situations are where two people have skills that complement each other – where each has a strong skill that covers the other’s weak skill. In this manner, the partnership is more powerful than the person alone. History is filled with these partnerships (Hewlett & Packard, the Beatles, Jobs & Wozniak). The cons are simply a mis-match of goals and styles. If you want to own a park for a lifetime and your partner wants to flip a park after a week, then that’ a bad combination. To prevent this type of mistake (just like in a marriage) you should discuss the goals with your partner thoroughly to make sure you are all on the same page.
This is a loaded question. I have no issues with partnerships just so long as the partners are spot on concerning goals, process and a full understanding of duties and responsibilities. Some people partner without spelling out the who, how, what, when, where and why- and that can be a disaster. I look at partnerships sort of like a marriage- you better enter the partnership hopeful for the best- and prepared for the worst. What is the park needs money?What if a partner needs out?What about divorce?What about death?Estate planning?Who does what- and what if that partner is not able to manage his/her end?Are you flipping or long term? What if… your flipping and you need to hold long term- or you were going to hold long term and now you need to flip? Buyout agreements?What is your operating philosophy? Ethics?I have talked to lots of people about this and many get into partnerships that are pretty loose- the wheels come off and all of a sudden only one partner has cash to put into the deal… or one want to then sell their share- and now there is a new partner that does not think the same about operations. I think partnerships are great- just as long as all the T’s are crossed and the I’s are dotted…
I agree there are good and bad. There must be a common vision and a plan to use each others strengths. However I see a big benefit on the front end due to the increased capital available.
In my search, I see limited opportunities for someone entering with 80-100k to work with. However double that amount opens up a lot more doors. I would also like to put half of profits back into the partnership for a few years to expand the holdings and limit tax burden. Call that my five year plan …
There are many ways to address death/divorce/etc through the partnership agreement. As you can see, I think a partnership can be a good thing if established with simR thinking people.
Dean, where in the country are you located and where are you lookingI may have an interest partnering up to double the seed moneyPlease list a contact addressBest
I’m a fan of partnerships - marital or otherwise.You should probably be thinking even bigger - like raising money from passive investors so you can purchase an even larger property. Partners can be active or passive. I’ve got both.To your continued success,-jl-
I want to partner with mentor so how can I structure partnership where I want to do all the work but get there mentorship from time to time. 50/50 wouldn’t make sense to them so what other ways i can structure .
We set up a LP company, REGF Capital Limited Partnership (www.regf.ca)to have a tax effective partnership agreement for us between family, friends and accredited investors. We have just finished the paperwork and have yet to update the website after making these extensive corporate changes.
This was done not for one or two deals but for our plans of 10 plus real estate purchases.
This set up allows us to maintain control and do the work and allows everyone to reap the financial rewards. Win win.
Ken Parfitt