Mastering Goal Alignment: The Key to Successful Partnerships
We have discussed before how the real estate investment business is a team sport. This team generally consists of our property manager, brokers, attorneys, CPAs, etc. However, one team member we haven't touched on yet is the partner in your firm or for that particular deal. In many respects, this person is your most important partner. And the truth is, that partner could make or break a deal as well.
Most of our partners have usually had some kind of family relation, but this isn't always the case. Of course, Jeff and I are indeed brothers and close in age. This has had a significant impact on our partnership. We have been through some of the worst and best moments in life together.
The Right Reactions When it Hits the Fan
What really can count is how your partner reacts when things go poorly. Does that person leave you hanging, or are they full hands-on-deck trying to resolve whatever the problem is quick? Can you trust this person, and do they really try to have the best interest of everyone at heart? Are they ethical and going to do the right thing? These are crucial things to know, but unfortunately, you don't find that out until things hit the fan, if you catch my drift. Jeff and I are lucky we have been together many times when it's all hit the fan, and we have proven that we can successfully navigate through anything.
Your Partner Should Offset Your Areas of Weakness
Consider if your partner complements you in some way to help you offset your areas of weakness. Further, do they bring a unique and valuable perspective to the table? We learned to split our roles with Jeff and me based on our strengths. For example, Jeff has focused more on the acquisitions since he was a broker before and has dealt with many tough negotiations. I have skewed more towards the investor relations side because I've been good at conveying our message to interested people. Also, do both partners work enough to keep their side of the bargain.
How things are critically thought about is important too. Jeff and I don’t always agree 100% on everything, but we do help each other see different angles to come out with the best outcome. And, we trust the other enough to know that the other perspective is worthy of time and consideration. There are so many ways to go about things and you need someone there that will help open your eyes to other possibilities. It’s good to have someone to bounce ideas off of too.
Aligning Your Goals with Your Partner
Another consideration is goal alignment. Do you both want similar outcomes and have thoughts on how to get there? My brother and I have goals related to cash flow, and we are 100% aligned on what it will take to get there. We aren't trying to build a massive firm with many employees. Instead, we have agreed to keep our team at JB2 Investments lean and mean. We don't want to create a behemoth of a business. To us, a respectable size of about 100 million in assets under management is the place to be. We feel like this will allow us to live a balanced life.
Getting to the Right Balance in Your Partnership
Where we are today didn't happen overnight. So, you should expect it to take some time for you and your business partner too. We have spoken to a handful of potential operating partners on specific deals. We may go down that route eventually. This is all with people we have known for at least a year, and we have worked with them in some fashion, so we believe we know what we will get.
It’s a must to have time and many conversations to get a good feel for people. Ultimately this is your most important partner, and you must get it right. Lastly, make sure this is someone you can have fun with because you will spend a lot of time with them. All work and no play isn't so fun – so find a partner that you can laugh with and be serious with to get the job done right.