4 Warning Signs You Are In A Bad Real Estate Partnership (And What To Do Instead)

Real Estate Investing Partnerships

Partnerships can be as powerful as they can be disastrous. In real estate and business, creating partnerships turns into a necessity for most— regardless of the size of capital, skills, and intelligence of the management. Buffett and Munger; Jobs and Wozniak, are both examples of beneficial partnerships. Finding someone to be your confidante and counterpart can be a way to protect you and take your business to the next level, but it’s important to keep in mind that partnerships can get messy quickly (when you choose the wrong partner).

You need to be on the lookout for the hints that will clue you into who would be a deterrent to your success; as opposed to a catalyst. Speaking from experience, I know what a bad partnership looks like, and I want to help you avoid the mental drain that I went through. Keep your eyes open for the following for signs of a toxic real estate relationship.

Unmatched Strategies Or Goals

Sharing goals and business strategy with your partner is a must. Mismatched priorities will lead to conflict. Say, one partner wants to buy and hold and the other wants to fix and flip. The different interests will affect all areas of your business. You will look at deals differently. You will build your organization and operation differently. You will work with clients and vendors differently. Little differences in opinions and aspirations will cause big differences in the ground-level, day-to-day operations of your company.

Same Skill Sets

When you and your partner have too many of the same shared strengths, you are no longer complimenting each other and the company by bringing more to the table. It’s a waste if both of you excel at meeting clients, but struggle with numbers and details. Find someone who will be strong in the areas that you need to work at; and weak where you always succeed.

Opposing World Views

If you and your potential partner have different ways of seeing the world and these ways are in opposition, you will face challenges within your business. The way you see things makes a difference. Your perspective affects anything from the way you rehab a project or who you will hire to manage and maintain a property. It’s ok if you don’t agree on everything, but you must be able to have a synergistic business relationship. Remember— you want to be stronger as a pair than you would be alone.

Mismatched Interests

You need additional matched interests in your partnership than simply making money. It’s almost a given that everyone wants to make money. Sam Zell, billionaire real estate investor, says that the actual definition of a partnership is the equal sharing of risk. Along with sharing risk, you and your partner would benefit by being equally as motivated to move forward and achieve goals. With both of you being able to bring different strengths to the table, you have the possibility of accomplishing more. Bringing different strengths into the partnership is a plus; while having unaligned interests is not. You both must be invested in making the business a success and have that desire to the same degree.

With my previous partnership, I wanted to scale operations and invest in more properties. My partner, on the other hand, was content with the properties we already owned. Our level of drive was not equal. I felt stagnant and wanted to thrive, which was in opposition to the partnership that I was part of.


Overall, if you are considering a partnership— which I highly suggest you do consider— know what to look for and what the warning signs are. If you have made a choice with a partner and it’s not working out the way that you hoped, take steps to correct it. It’s better to make the changes sooner rather than later.