What to Do Before Investing in Real Estate with a Partner

Real estate has been considered a solid investment for ages. Recently, the real estate investment market has grown substantially with new investors joining all the time. 

The high cost associated with real estate prompts many investors to invest with partners instead of going solo. Before you decide to go that route, however, there are a few things you should do first.

Make Sure You’re on the Same Page

Everyone has their own vision and investment strategy they want to pursue. Before you settle on a real estate investment partner, make sure you’re both on the same page. 

You should have the same vision and be on board regarding what real estate investing strategies you want to use. Remember to check in with each other regularly throughout your investment journey to make sure you stay on the same page together as well.

Create the Right Entity

Depending on how you choose to invest in real estate, you may need to think of it as more of a business than an investment venture. This is especially true if you choose to invest in real estate by renting your properties to tenants. 

Think about what sort of entity is right for your investing. You can’t have a partner as a sole proprietorship, so bringing on a partner means reconsidering your structure. An LLC might be a more appropriate choice. LLCs can have an unlimited number of members. They also offer protection by separating your business assets from your personal assets.

Choose Your Partner Wisely

Who you choose to be your real estate investment partner can make or break your investment experience. Ideally, your partner should have strengths that make up for your weaknesses and weaknesses that you can make up for with your strengths. They should also be someone you work well with and who you work well with. You won’t always agree on everything, so think about how to manage conflicts when they arise and how effectively you think you two can do that together.

You should always consider carefully before deciding to partner with someone in your real estate investing endeavors (or any other investments you make). Take some time to thoroughly evaluate yourself just as much as you evaluate your potential partners. Once you’ve chosen your partner and worked out all the details, do your best to keep things simple. Take steps to protect yourself from problems down the road and review your investments regularly. That will help you have the best experience with your real estate investment partner.

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