Private Money Partnering

Don't Do Business With Friends If:

• An objective review of any one else’s qualifications

would show them to be a better business partner

• You say you’d rather work only with friends. Then

recognize that you’re just a socialite running a charity,
not a business venture.

• Popularity matters more to you than profitability

What Do Businesses Want?

Now, what does any business want? What about the ice cream shop on the corner or the insurance company?

√ Profit
√ Customers, an expanding customer base
√ Good will, and a good reputation
√ Repeat business
√ Steady sales
√ To stay ahead of the IRS

It’s really the same situation in partnering. It’s a business, and you want to have the same kind of results. That’s a good business.

Real estate is a business. Partnering is a business too, and must be looked at from a businesslike perspective. No matter what business you’re in, do you want to have one client? What will happen to you as a business if you have all of your eggs in one basket? That’s not smart. You always want to diversify. You always want to have options, or at least the sense of options. Always. If there was a printing company, for instance, whose major clients five years ago were Eastern Airlines and IBM, where would they be today? You always have to protect yourself by being aware that things change. And because things change, you need to be aware of what you need and want at any one time so that you can continue to survive.

Now what happens to businesses? They can just get by, or they can thrive, or they can die. If you want to get involved in any partnering business, remember you don't want to die, you want the partnering on that particular project at the very minimum to thrive. So we’re not talking about hobbies.

John Schaub, an investor and lecturer from Sarasota, Florida, talked in a recent newsletter about partnering. He said that if you’re going to be active or successful in business or in real estate, sooner or later some people are going to ask you to be their partner. That’s the way it works. It’s dangerous to ad lib your answer. You want to have thought it through for yourself.

Getting What You Negotiate

Let’s talk about a fact of business. In business, you get what you negotiate, not what you deserve. That’s the way it works in putting together a partnership, in building an agreement. And this is where you start with yourself and work out from there in relationship to somebody else. Many joint ventures get into sticky situations because major issues and key factors have not been thought
through beforehand, and negotiated.