How to Partner Up and Profit Big

Real Estate Investing for Beginners

Want to get started in real estate investing but don't have the capital? Learn how to partner up with experienced investors, leverage your skills and expertise, and share in the profits. From finding the right partner to structuring a successful partnership agreement, this guide has everything you need to know to make your real estate investing dreams a reality. Don't wait - start building your wealth today with the power of partnership!

Stay tuned for our five-part series where we discuss the top investment strategies!

More of a reader? Catch the video transcript below!

Welcome to part three of my five-part series on investing in real estate with little to no money.

Missed the others? Binge those videos and blog posts here:

Part One: How to Make a Profit With Wholesaling

Part Two: The Power of Lease Options in Real Estate Investing

Part Four: How to Fund Your Deals with Hard Money Loans

Part Five: How to Fund Your Deals With Crowdfunding

This week is all about partnering.

What is partnering in real estate investing?

Well, it’s exactly what you’d think it is. Partnering is when you partner up with another investor or property owner in order to share in the effort, risk, and reward of a potential real estate investment.

So, this is a great method to get into the real estate investing space with little or no money because if you’re able to analyze a deal, find a deal, or want to be part of a deal but don’t have the money to do it 100% yourself (or maybe you do, but don’t want to take on the full risk alone), bringing in other people who are willing to spread the risk and the reward could be something that works out for you.

Ideas for Successful Real Estate Partnerships

There are a few different ways to invest in real estate: flipping houses, some kind of development project, buying and holding a rental property, buying and holding a single-family home, buying a home you live in and equity-share with another person, and more. Let’s touch on a few of these.

Fix-and-Flip Properties

Let’s say you wanted to flip a property. You find a great deal and you need $150,000 in cash for all the essentials like the down payment, closing costs, repairs, and all that.

What do you do if you only have, say, $50,000? Well, it might be a good idea to partner up with somebody who has another $100,000 and an appetite for this kind of project. It could be a situation where you put in your $50,000, they put in their $100,000, and because it’s a 25/75 split, you split the profit that way, too. Or maybe you negotiate a little higher percentage of the profit since you were the one who found the deal, or maybe you have construction experience or something else you bring to the table that might warrant a higher percentage of the profit.

Rental Units

Now, let’s say you were going to buy and hold rental units. If you have the experience and the time to manage the properties, you could leverage this in your partnership agreement for a higher percentage of the profits. You may not have the majority of the money, but if you can deal with the tenants, leasing, and management of the property, you could be entitled to more of the profits.

Equity Sharing

Let’s say I have the down payment money and the financial profile to get a loan on a house. I buy the home, and then you move in as a tenant and assume responsibility for the monthly payment and maintenance of the property. Then, at a predetermined period of time in the future, we agree to sell the property and split the profits.

So in this situation, you can relieve me of the cost of the monthly payment, plus the headache of taking care of the maintenance of the property — then in five years when we decide to sell, we’ll split the profits. Or maybe we instate a clause where I buy the house, you make the payments and handle the maintenance, and then you have the first option to buy me out at the market value on that date and if not, I have the second option to buy you out. If neither of us can or want to buy one another out of the deal, then we agree to sell and split the profits.

You’ll want to make sure your contracts are airtight, though, and make sure you review them with your attorney to ensure everybody’s on the same page in regard to rights and responsibilities under the contract.

What’d you think of these ideas for partnering up in the real estate investing game?

That’s all for me today, guys, and I’ll see you in my next one!

Brent Edwards (aka Brent the Broker) is a residential real estate agent and Realtor in San Diego, CA who helps clients buy and sell homes in San Diego, California and all surrounding areas. Brent is a highly-recommended Realtor in San Diego by family, friends and past clients. Call Brent today at 619-550-8070 if you have any questions about real estate in San Diego or you'd like to buy or sell a home.