Most people talk about what to say and do in order to raise money for your deals, but what about if you’re the one with the cash looking for a great return? If that is you, here’s seven questions to ask your potential partner to make sure the deal is sound and you’re comfortable with the person who is going to be in charge of your return.
1. What are you looking for in a partner?
Maybe you want to learn the business so you might be looking for someone that will teach you or maybe you want to be totally hands off so you’ll looking for someone with great expertise and a track record. Possibly you want this to be a long term thing so you’re looking for someone you can do several deals with.
2. What value do you add to the partnership?
The good investors (especially the ones that have been through our training!) are going to make sure you are bringing value to the table beyond money – they know that they bring tremendous value to the table and want the same in exchange.
3. What are your core values?
I recommend you figure out what you value the most and only work with people who share those values. Profits are the main consideration but other things come into play. For us, it’s important to us to have good relationships with our tenants and our partners.
4. What is your time horizon for the investment?
You want to know this so you can align yourself with people who have the same or similar expectations.
5. What is your credit score like?
I think credit is a huge indicator of how someone treats money. If someone isn’t respecting and caring for their own money, there’s no reason for me to expect them to love mine more. I would rather invest with a rookie investor with great credit than an experienced investor with bad credit.
6. What and who do they know?
Once again, I would rather work with a rookie investor that has invested in their education, put time into developing an experienced team and who is going to work harder, than work with an experienced investor who isn’t trying to improve what they do or develop their network further. Focus on finding a partner that is enthusiastic and energetic. Find out who is on their team and what experience those people have.
7. If something goes wrong are you going to be able to handle it?
Things happen… sometimes there’s a burst pipe, sometimes a tree causes havoc with the foundation or maybe a tenant destroys the property. These things are rare but they DO happen.
Written by Julie A Broad