There is only one good reason I know of to take on an investment partner! It’s when you don’t have enough financial horse­power to do the total deal by yourself. You need help!

Consider the want-to-be investor who knows just enough about real estate to be dangerous. He has more guts than it takes to fight mountain lions, but not enough cash to rent a “pay toilet” in a greyhound bus depot! Nine out of ten times, this joker will attempt to convince someone with money – that by simply joining together, they can both become millionaires! That’s pure horse-pucky, and it’s certainly the wrong approach to use if you’re a broke investor looking for “Mr. Moneybags”.

Looking In All the Wrong Places

Inexperienced folks often think their best friends are the best candidates for investment partners. Frequently you see partnerships develop between friends at the golf course members of the same social club, between people who attend the same church or work together for the same employer. Let me assure you, it’s not nearly enough to guarantee a successful Invest­ment relationship.

The biggest mistake that cashless partners make trying to entice a partner with money is to oversell the deal! They often overstate the benefits the money partner is supposed to receive. If I were to show you all the proposals offered to me, and if we added up all the profits I’ve been promised I would need to rent the Bank of America headquarters building to store my money.

Benefits must be Totally Equal for All

One major problem with most small real estate investment partnerships is that al­most always they are engineered by the broke partner! The typical arrangement I see is where on partner I. asked to put up cash and the other is supposed to contrib­ute equivalent personal services.

I don’t know how you think, but I’ll tell you this much about myself. I’m very skep­tical about anyone who proposes a joint plan using my money, while risking only personal services themselves. My first ques­tion is aimed directly at the heart of the issue. If you’re so smart, and if your ideas are so good, then why is it I’ve got the money and you don’t? Unless the question gets answered to my total satisfaction, I will not consider going forward. And neither should you!