Real Estate Partnerships That Actually Make Sense

Everybody wants a partner in real estate until the partnership becomes the deal’s biggest problem. We get honest about why most partnerships are a mistake, how investors give away equity too quickly, and what to do instead when you’re feeling unsure about money, experience, or the unknowns that come with buying property. 

I share the two rules I use before I ever consider a real estate partner: they need to be smarter than me in the exact asset class or they need to bring more money than me. We talk through what that looks like in the real world, especially in mobile home parks and RV parks where operations matter, and why “comfort blanket” partnerships can quietly destroy your upside. You’ll also hear why small deals often don’t justify splitting ownership, even if people are asking for a piece of the action. 

We also dig into the mechanics that keep partnerships from turning into a mess: operating agreements, clear roles, who does what, how distributions work, and what happens if someone doesn’t perform. And if your real goal is raising capital, we cover alternatives like promissory notes and fixed interest so you can fund a deal without handing away long-term equity. 

If you’ve ever had a bad partner, considered bringing someone in just to feel safer, or wondered what a fair structure really looks like, this will help you think with clarity instead of fear. Subscribe, share this with a friend, and leave a review, then message me with your best or worst partnership lesson.

Transcript

Why Most Partnerships Fail

SPEAKER_00 0:00

Everybody wants a partner on a real estate deal, but I actually think most partnerships are a mistake. Alright. And here's why. People generally, when they get into real estate, a lot of investors, they they're scared of the unknowns. They're like, well, who can I partner with, right? And they think partnership means splitting equity, splitting the deal, right? And they're generous with what they give away, yada yada. So I want to break down what I think a partnership should look like, or you know, just from my perspective, right? I'm always gonna tell you this is my perspective, my experience, you do you, right? But just from what I've I've encountered and what I've dealt with and what I believe on the subject, I've had good partners, I've had bad partners, right? All right, so here goes. Um, when you're looking for a partner, you're generally looking for a real estate deal, or you found a real estate deal, and you're like, man, I need to partner up. Alright, and

The Only Two Partner Criteria

SPEAKER_00 1:02

here's the whys, right? You're like, I need the money, I need the experience, I don't know this, I don't know that. Just some general guidelines is I don't partner with people that aren't either smarter than me or have more money than me. Okay, and if you want to break that down, is like if I don't have the the knowledge of the type of property that I'm buying, I'm probably gonna partner with somebody. Right? If I don't have the money or the financing or the connections or whatever to get the you know the money or to get the deal done, I'm probably gonna partner, right? Smarter or more money, all right? So a lot of times these days, deals that I do, I stay in my lane in their mobile home and RV parks, so I know what I'm doing, right? And I partner with people that I've done these deals with before because of you know we we do good business together, you know, and I um they'll they'll you know we'll split it, right? They'll fund it and and I'll be the GP, the operator on on their deals.

When A Deal Is Too Small

SPEAKER_00 2:12

But on the other hand, if the deal's smaller, like I don't need a partner, right? And and it wouldn't make sense for me to go get a partner for either party, right? Like, I've got a client right now that's buying a park, it's a 20-something uh spot park, and you know, he's raising money, and he's like, Well, people want part of the deal. I'm like, absolutely not, like, that's a small deal. Like, you nobody's gonna make money. Say y'all did split it. What are you gonna split? Like, $1,000 cash flow a month, $2,000 cash flow a month, the upside's good, but like it's not worth it. Like, if I'm gonna partner, it's a big deal. It's like it's a you know, several million dollars or whatever, right? It's not gonna be a small deal. The juice has to be worth the squeeze. Alright, I've partnered before with people, and you know, it just didn't work out because there were small deals. You know, and and I had to learn the hard way. And and things weren't written out, they weren't they weren't

Put It In Writing Up Front

SPEAKER_00 3:18

in black and white. And anytime you're gonna do a partnership, there's something called an operating agreement, and that should be like done up front. Like, hey, who gets what, who does what, when, why, how, like, what's your job, and can you be fired if you don't do your job, and how's the allocations, you know? You can hire an attorney to help you with this, and it's probably well worth money, you know. I like I said, I've done partnerships where we didn't do that, and it was like, well, you said this and you said that, and it was just like a cluster, and and nobody like don't get me wrong, I I think most people just do the best with the information they have, right? Everybody's perspective is different, and if it's not black and white on paper, agreed upon, like, where everybody's warm and fuzzy and it's crystal clear, there's usually gonna be issues, right? So, like, just you know, get the attorney to to draft the stuff out when you do want to get a partner. And why do you want the partner? Partners aren't

Raise Money Without Giving Equity

SPEAKER_00 4:21

bad. I get partners all the freaking time, but if you're just raising money for a deal, you don't have to give away equity, right? There's plenty of people out there that'll take um interest on their money, you know, eight to ten percent interest with a promissory, right? Personal guarantee, like plenty of people that'll do that. There's plenty of people too that be like, hey, I want 50% of the deal or 20% of the deal. It's like you just gotta make sure the juice is worth the squeeze, like I said. If it's a half a million dollar deal that's not gonna cash flow a ton, do you want to split that with somebody? You know, you just gotta bounce those things around and really vet the partners, right? Like, talk to people they've done stuff with before, make sure it's somebody you want to be associated with. Okay, like I've been very, very, very fortunate with partners later on down the road because I learned all these lessons early on,

Vet Partners And Avoid Fear

SPEAKER_00 5:30

right? All I'm saying is just don't be quick to jump in a partnership, really, and I know I'm hammering this away, but a lot of people they that's their first thought, and it's just fear. Don't make decisions based off of fear. I think that's the best thing I can say. All right, and yes, like if you're gonna get a big deal and and somebody's gonna fund it all and you're gonna operate it, and you want to split it or however you want to do it, and and it's a big deal, and that's the way you you're gonna do it, then great, right? And if you want to give a bunch of people equity in a deal, like just really look at it. That's all I'm saying. All right, and and two rules, right? The two rules I told you earlier make sure they're smarter than you or they got more money than you. Alright, don't just partner for a comfort blanket.

Referrals Mentorship And Deal Bring Fees

SPEAKER_00 6:26

My name's Travis Wells. This is the Property Profits Podcast. I hope you're enjoying this episode. You've enjoyed other episodes. If so, please refer this to a friend, a family member, it means the world. I'm also opening up some mentorships for buying your first mobile home park. We're gonna start in four weeks. Let me know if you're interested. You can DM me on Facebook or uh follow me on other socials also. Love the support. And let me know what you think about this episode. Let me know if you've had a bad partner, if you have good partners, like what kind of thing. I'm really curious to hear or if you have any other insight on this, right? I get asked all the time, will you partner with me if if uh if I bring you a deal and I'm like, let me get this straight. Alright, you're gonna bring me a deal, I'm gonna underwrite it, all right, and I'm going to handle everything, and then I'm gonna operate it. And you want a piece of that for bringing me the deal that wasn't a deal that had to do everything on? I don't think so, right? I might give you a fee for bringing it if I buy it. That is about it. So I hope this is as clear as day. Thank you for listening until next time.