Partners in real estate - ey curumba...

One thing I have realized in the last several months more than anything is that is partnering with people in your own company is a bad bad bad idea. And I am talking about "sweat equity partners".  For christ sakes, how many times must I learn the lesson of not taking on partners in my businesses!  Should I partner with people on specific real estate deals - sure!  You betcha!  But no more sweat equity partners.  Show me the money or show me the deal.  Now, should I partner in a real estate investing company and do all my deals with a partner.... hell no!  What a schmo..  Lord have mercy, I’m the one who has the real estate club, who has worked my butt off, scrimping, scraping, and working my fingers to the bone to build it.  Why oh why, do I think I need to take on a partner to do all my deals with? 

Well for one - I keep thinking I do not have the time to take it all on myself.  I am busy with the Club and now my new LA Meeting & Event Center and just felt like having a partner to carry half the work load - would be a great help to me.  But “half the work load” seems to be a complex, twisted, perception to most people.   I have only one way of defining work load.  Are you physically doing half the work – yes or no?  Are you doing the marketing? Are you bringing in the deals?  Are you bringing in the capital?  Are you managing the job?  Yes or no?  It’s very simple.   If I am going to do all the heavy lifting – then what do I need you for?

Listen people, I have learned the hard way to not be eager to take on partners in real estate investing or any other business for that matter.  And if you do – then for goodness sakes, please please please identify from the very beginning what is expected of each person and put it in writing!  Never make deals on a handshake, good faith, or because someone has a good reputation.   All the above is good to start – but always define it and then put it in writing!  Ask me how I know this.  I am the poster child for trusting people & doing deals on a handshake.  Sometimes I’ve come out fine and sometimes I haven’t.  The times I haven’t are the ones that hurt and they hurt bad.  Sweat Equity Partners = Pain-in-the-Assness.

I have gotten some real good advice from my friend Dave Berens lately on partnerships.   He is very clear with me;  I do not need a partner in my real estate business.  But what is OK is for me to partner up with people on specific individual deals as I see fit.  Nothing more.   So let this be a lesson to myself.  Stop the madness of taking on partners in business!  And if you do – then define it,  tweek it, hammer it out, then get it all in writing! But above all – for real estate deals – just take on a partner – per deal. Learn from me – please.  Don’t do it baby!