Many individual investors struggle with the idea of partnering with others for real estate deals. They may have gotten into real estate as an alternative to stocks and with the same mindset of being an individual investor. For different reasons, they may oppose or may have never considered joining forces with a team to make their goals happen. Below are there reasons that partnering with others can be good for you and your wealth building.
1️⃣ Scalability
When two or more real estate investors join forces, they can do the same amount with less effort or more with the same amount of effort. Putting resources together allows for financial and time synergies, allowing for all involved to do more with less of each. These higher outputs are what makes scalability very easy. Rather than attempting to do it all yourself, one house at a time, there is the alternative to pool more funds in order to do larger deals: more units, more cash flow, more upside.
2️⃣ Combined Talents
Partnering with others on your deals is great way to leverage other people’s talents. For years, I have known a fellow investor who is highly skilled at handiwork, construction and renovation projects. He is passionate about the work, whereas I am not, and loves to get his hands dirty. We both have the same mission to grow wealth through real estate and continue to seek opportunities for us to create an alliance the utilizes the best of each of our skills to grow our businesses. Perhaps you are a great deal finder and have an associate who is great with finding or providing capital. That combination has great potential.
3️⃣ Shared Risk
Another great benefit of partnering is sharing in the risk of the project. Would you prefer to do a $1 million deal yourself or with others who put in capital or time to join you. Sharing in risk is not preparing for failure; it is rather a method for investors to invest with reasonable exposure downside risk (because others are involved and have a stake in the success of the investment). Not to mention, having combined the talents and skills of those in your team, you should be able to better identify and mitigate risks as part of a higher-performing partnership.
Sharing in the Wealth
If you are still not interested in the idea of partnering in real estate, let me ask you this: Would you rather have 100% of $100,000 or 2% of $10 million? Your likely response was the latter, which is double the equity of the former. When it comes to wealth building, when you evaluate the alternatives objectively, the obvious answer is partnerships.
Recognizing these benefits of partnering, Robinson Capital partners with other syndicators as well as our investors to create great wealth building opportunities for working professionals and people seeking to diversify their portfolios.
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