How Investment Partnerships Work

Download this Article in PDF Format: 

Investing in real estate is something anyone can do and it can be both fun and very rewarding financially. There are many aspects of real estate investing, but in it's most simple form, it is owning property. In the past, many investors became involved in real estate almost by accident; but this trend has changed in recent years due to our unstable economic condition. Now people are actively looking for safe places to park their hard earned money to protect their families financial future and real estate is becoming a safe haven for their wealth.

Many have turned to real estate because it offers a commodity with intrinsic value that the investor can exert some form of control to determine its value or appreciation. Because of the expected inflation caused by run-away spending of our government, everyone needs to be looking for somewhere to put their capital to protect it and to provide a hedge against inflation. Owning real estate provides this and much more.

So, once you determine to take an active role in protecting your families financial future by entering the world of real estate investing, you must decide your approach. Many choose to go it alone and learn as they go. This works, but it can be expensive and very frustrating because you really "don't know what you don't know" about real estate. Others decide to join a group of investors and let the managers decide how and where to invest their money. Still others decide to take a more active role and team up with experienced investors who will guide them in making their purchases. As Robert Kiyosaki so aptly puts it - "Investing is a Team Sport". So those who decide they need to be part of a team need to have some criteria for finding the right team for them to join to learn real estate investing. One way is to become partners with seasoned investors who can guide you along the way. There have been many partnership programs over the years, some good - some not so good. So the question becomes - How do I know a good one from a bad one?

There many reasons why partnerships fail and it seems to be counter productive to try to enumerate these reasons. So instead, let's take the positive approach to this issue and try to define several key elements that are present in good partnerships.

  1. Trust - Partnerships must be built on trust. Both parties in the partnership must trust each other to perform their end of the bargain. The partner managing the rehab must be able to perform the work and the partner supplying the funds must provide them in a timely fashion.
  2. Knowledge - The partner responsible for the rehab must have the knowledge and managerial skills to oversee the work on the property. This includes not only finding the best contractors but knowing that the work conforms to local codes.
  3. Involvement - The partner that performs the rehab needs to maintain his involvement in the project long-term. In other words, he does not perform the rehab, get paid, and move on the next project. He needs to continue to monitor the property to ensure it is properly maintained by the local property management company.

Finding a partner with these characteristics is essential for any investor who takes the challenge to invest in out-of-state rental property. Since the investor will not be able to visit the property on a regular basis, he must develop a solid, working relationship with a local business person who will take care of the property as if it were his own. These characteristics are part of the partnership program offered by HomeReplay, LLC.

HomeReplay is an active investor in the areas we sell to our partners. We are there every week working on the properties, checking rentals, and verifying the work of contractors. Our success as an investor is directly related to the success of our partners. We have a vested interest in the properties and because of this, the risk to out-of-state investors is greatly reduced.

We are committed to working the areas we own property in and are constantly looking for better deals. Better deals in new properties to purchase, better pricing from local contractors, and better service from our property management companies. We aggressively protect our investor partner's capital because we are protecting our capital in these properties at the same time. Committed involvement in the daily operation of the property is the key to our joint success in rentals!

Gary Geist is a seasoned real estate investor with over forty years experience. He has owned property in several states in the Midwest and currently has large property holdings in Ohio, Indiana, and Pennsylvania. He is the owner of HomeReplay, LLC which is based in the Midwest and provides tools and turn-key investment solutions to investors world-wide.