In order to reap the benefits of CRE investing––cash flow, solid return potential, tangible assets, and tax savings––one needs to get in the game. So you’ve looked at the types of real estate and decided to make a move. But how do you find partners? How do you know if a partnership is the right one for you?
Here are my five things to consider before entering into a partnership agreement:
1. First of all, get organized. Put your financial story in order, identify the strengths you bring to a partnership, and know what your investment goals are. If you’re serious, you’re more likely to connect with high quality investors to be partners.
2. Educate yourself. Read books, listen to podcasts, take classes, and network, network, network. The more you know, the easier it will be to make sure you’re going to spot a successful partnership.
3. Talk to your network to gather interest and leads. My first investment deal came to me because of my network, experience, and reputation. A capital partner called me out of the blue and said, “I’ve got to meet you.” We met for lunch, and he asked, “When are we going to buy a building together?” We ended up buying many buildings together, and that phone call led to the creation of CEG’s investment strand. Capitalizing on an opportunity could be your golden ticket!
4. Find people that have the same values, philosophy, risk tolerance, and goals as you do. Also, make sure they have the same investment time horizon as you. Will you buy and hold the property long term? Are you looking for short-term deals?
5. Know what each partner brings to the table. You want to make sure the partnership has all the capital, expertise, and contacts to be successful. It’s important to know what you don’t know, or don’t have, before signing an agreement.
As always, utilize experts in the field so you have a clear idea of what you’re getting into. Ultimately, you don’t want your money to be lazy, so put it to work. With the right partners, investment partnerships are a great way to make that happen.
Jeff Salzbrun is the owner/broker of Commercial Equities Group (CEG). As a veteran-owned real estate brokerage, CEG has been involved in thousands of sale and lease transactions, ranging from single offices to 250,000+ square foot buildings. At CEG, we get your deal done. We know space, and we know the CRE business.
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