Actual estate investing is exciting when you’re just finding began. Genuine estate is all you can feel about and all you can speak about. Your enthusiasm rubs off on other people and you instantly commence attracting people that want to lend income on for deals, partner with you on properties, joint venture with you on aspects of your organization, etc.

The difficulty is that when you’re so excited, it is challenging to imagine anything EVER going wrong. Why would you want anything more than a handshake and verbal agreement?

Certain, you could be laughing as you study this, but you’ll see… when it comes time to putting a joint venture together, you’ll be eager to get moving along and you just may well make this critical genuine estate investing mistake… and it COULD wind up costing you tens of thousands of dollars, friendships, and worse.

I as soon as heard an attorney approach genuine estate investing joint venture agreements in terms of marriage… He said, “Plan the divorce just before you get married”! It sounds morbid, but the advice is sound (I know from Personal expertise… and not As soon as, but numerous times!). It’s truly funny to see what happens to folks when money and anxiety are involved!

In this write-up series, I’ve highlighted 17 errors that I made early on and share with you what you can do to steer clear of producing the same genuine estate investing errors I created…

Genuine Estate Investing Mistake #two: Not having joint venture agreements in place with partners

I remember reading a book in which the author talked about partnerships and suggested against them. Shortly thereafter, a mentor, coach, and buddy warned me against partnerships, one in particular with my best buddy at the time.

However, I thought my circumstances were diverse and that I could handle my “partnership” in my initial rehab project. I was so wrong! In a brief time, my partner and I had been at every other’s throats.

We ruined both our business and our friendship.

We didn’t have the very same expectations. We did not have the exact same thoughts on points. We did not manage finances the same way… We just truly did not lay the groundwork properly and made every mistake you could envision!

How to Stay away from Actual Estate Investing Mistake #7

What I learned later was that “partnerships” by nature rarely function.

The much better your friendship or relationship is, the worse it will turn out in the end.

Rather, look at the option of constructing many joint ventures. This enables you to do projects on a deal-by-deal basis. You do a deal, if it works out, you do another and yet another and so on.

That way, you are not bound by a “partnership” and you are not obligated to every other’s personal finances. When you outgrow the relationship, you merely move on to new joint ventures.

Recognize that there will never be true equality in a enterprise partnership, so shield your self and your “would-be” partner by setting up joint ventures instead.

It will save business relationships and friendships.