Private Money Partnering

Chapter C.

People Issues
Partnerships As A Business Venture
Getting What you Negotiate

People Issues

There is tremendous value in a good working partnership, and I’d like to share with you the fundamentals of constructing the kind of joint venture partnerships which can be very beneficial to your investing career.

We’re basically going to be talking about people issues, not money issues or deal issues, but the people issues. Because that’s what partnering is all about, or should be. Chuck Considine, who taught a lot of people about how to structure businesses, said that a partnership is two people getting together for a business purpose, one with the money, the other with the experience. At the conclusion of the partnership, the one who began with the money will have the experience, and the one who started with the experience, will have the money. Do you want this situation? Be honest with yourself.

I'll tell you a story about myself and two other folks when we were just starting out investing in real estate. There was a gentlemen, and I use the term loosely, who was going to help us, to be our partner, and work with us until we were all rich and famous. Here were three intelligent hard working people just trying to get a jump start on our investing by working with someone more experienced. What happened? We all got our training wheel dirty, in the same mud puddle, by working with someone who was not honest with us, who did not have mutual benefit of the partners, or the partnership, at heart.

Partnerships As A Business Venture

These are people issues, but the core of any well-structured partnership is a businesslike attitude between the people. This is the right perspective for any joint venture partnership. Being businesslike makes everybody more comfortable, more secure, and it will allow more things to happen. It’s business, folks. It if great fun to partner with friends. It makes life easier. Life is too short as it is, and you can get enough problems just walking around. But when you’re partnering you need to think about everything as a business relationship.

What you need are financial friends that you deal with in a businesslike way. If either the friendship or the business fails, one will be likely to take the other down with it. Jules Ganskepenge talks about how important it is not to feel betrayed by a friend through a business venture that goes sour. You like your friends, and trust them, and think that friendship should give you an edge in the market. But remember that if love is blind, friendship is cross-eyed, and you can't make business decisions based on who your buddies are. Here are some important points to keep in mind:

Do Business With Friends Only If:

• They have common sense, business experience, or capital
• They have personal connections that can help you
• They inspire confidence in you and everyone else
• You would go into business with them based solely on their business qualifications