Bill Rapp here with the Heartfelt and Hot in Houston Blog, and this is our newest segment: Ways to Find a Partner for Your Real Estate Investments!
Here are several ways to create value that you can offer a new real estate partner. Ways to Find a Partner for Your Real Estate Investments!
How to Win Over a Partner in Real Estate
1) Interest on Money
If your partner is investing money into the deal, you can offer them equity—but also interest on their money. This gives them two revenue streams from this partnership. The interest can be paid out as interest only, a lump sum, or monthly principal and interest payments.
For example, in my first deal, I took on a partner who put up the funds to purchase a duplex with cash. We each received 50% of the cash flow but he also received a monthly principal and interest payment. We set up an amortization schedule for his investment to be repaid over 15 years at 5.5% interest. There was also the option to refinance with a bank and to pay him off at any time.
2) Real Estate Tax Benefits
Depreciation, capital gains tax, pass-through deductions for losses, deferred capital gains, and tax write-offs for real estate investors are benefits that not all potential partners may realize. It is important to point these out—tax savings are a big benefit of real estate investing!
3) Regular Payouts
By offering monthly payments, you could be helping your partner substantially with their investment. Communicate this early on and see if this is something they would be interested in. This could correlate with paying out an interest payment if they put money into the deal. Making it clear that your partner would be receiving a monthly payment for a rental can be enticing. Who doesn’t love mailbox money!
When you put together your partnership, you can structure it to provide opportunities for your partner to earn extra money from the relationship, too. Put together a fee schedule—if a partner completes that task, they are paid out of the partnership. This would be paid out over and above cash flow.
If you are reading this, you have probably already emerged yourself in podcasts, books, blog posts, and forums on real estate investing. Knowledge is an amazing asset to a partner. There are a lot of people who want to invest in real estate but don’t have the time (or want to put in the effort) to actually do the research. Because of this, they have yet to get to a place where they feel comfortable doing it on their own.
Heck, even people who have done tons of research can get stuck in analysis
Reading, listening, and absorbing information is great, but you can also get hands on experience, too. Find a part-time job that will pay you to be a leasing agent, fulfill maintenance requests, or assist a real estate agent. There are many side hustle jobs you can do in real estate that will give you access to a network of people, documents, the market, and regulations.
Don’t forget about offering your services as an intern to someone. I like the idea of getting paid while gaining experience, but there are a lot of things you can do right from home to benefit an investor. Partners may come knocking at your door once you’ve acquired a few successful partnerships and can share that knowledge.
Time may be something you can offer someone who has a lot on their plate. Many who want to invest in real estate don’t have time to take a deal from start to finish. That is where you could come in! Make it as much of a passive investment for them as you can.
The Bottom Line
These are simply five of the main things you can offer a new real estate partner, but keep in mind that there are many more. Everyone has different skillsets when it comes to real estate investing. Determine the assets you have to offer to reframe the beginning of a new partnership. Ways to Find a Partner for Your Real Estate Investments!
The inspiration for today’s edition came from this original article: https://www.biggerpockets.com/blog/find-real-estate-partner?utm_source=Iterable&utm_medium=email&utm_campaign=Newsletter%201/17/21&utm_channel=28425&utm_content=MarketingXlrIn0%3D
If you are seriously considering moving right now you need to take action right now and talk to a reputable Real Estate & Mortgage Broker today, please call 281-222-0433 or visit: