Private Money Partnering

Lenders…Investors…Partners

Chapter J (continued)

Different Priorities
Words To The Wise

Do you have compatible styles? A major factor in determining whether a possible investor can be a true partner is to see how that partner approaches problems. How do they act when the going gets tough? Defensively? Vindictively? Rationally? Mr. Macho? Ms. Attitude?

You know that there will be problems. Murphy’s law was written for real estate investors. So what kind of problem solving skills does that person have when the unexpected and the unpleasant occurs? Are they going to freak out, panic, get angry? Or are they going to have a rapport with you that says, “This is all for one and one for all. We’re in it together.”

Words To The Wise

Know The Person

You need to know for yourself the kind of person you’re going to be dealing with, and that you want to deal with. There are those who would gladly trample all over you. The initial number projections aren't going to hold up if there are troubles and incompatible styles. It’s the people issues that make the numbers work, that cause the positive results, that make the deals happen.

Define Your Roles

One aspect of making an effective relationship for those with compatible styles is to employ the concept of the operating and financing partner. If these two roles are separate, and you have an active and a passive investor, the chances for a smooth working relationship increase. Try to avoid partnering situations where both people are doing the same task, because if roles overlap, problems are more likely. It’s important to know who is going to do what.

Communicate

The ability to communicate is essential throughout the venture
relationship. Should someone just put up the money and then shut up? Well, it depends. If the going gets tough, you want to have somebody that you can trust, and that trusts you, and that you can talk to. You'll need to know what the other partner wants and expects. And that may vary from time to time.

Presenting The Deal - Chapter K (continued)