So, you’re ready to take a leap of faith and bring a partner into your real estate agency. But before making the jump, you want to know the qualities to look for. It’s a big decision that impacts your business and career for years to come.
After all, you wouldn’t advise your clients to invest in a property without conducting due diligence. It’s wise to take the same precautions in choosing a business partner. This article will cover the information you’ll need to carefully select the right person.
Answer These Questions Before Looking for a Real Business Estate Partner
Before you start vetting candidates, you need to understand your own strengths and weaknesses, determine your goals, and know what benefits a partnership would yield.
Ask yourself these questions:
- What are my professional strengths and weaknesses?
- What are my long-term business goals?
- Which traits would be ideal in a partner?
- What are the potential benefits and drawbacks of having a business partner?
The first two questions will help you define what you bring to the table. The last question will help you envision how the right potential business partner can add value to your agency.
|Note: Take your time to answer the last question. Deciding whether or not to bring on a real estate business partner is not something to be taken lightly. It can have a tremendous impact on not only the future of your company but also your personal happiness. If you don’t have a clear rationale from the outset, you run the risk of wasting time and effort.|
After the introspection, you are ready to move on to the next step: looking for a quality real estate partner.
7 Traits to Look For in a Business Partner for Your Real Estate Agency
After managing my own agency for over 16 years, I can confidently say that partnering has been one of the best professional decisions I’ve made. It all comes down to having the right partnership structure and finding someone who complements your skill set.
Although it can be difficult to be completely certain that someone is a good fit, there are certain traits you want to seek out.
I’m a strong believer that good partners complement each other. You want to work with someone who can fill in the gaps in your agency.
For example, my strengths are sales and marketing. I like to think that I’m good at networking and bringing in prospective clients through the door. But I lack expertise when it comes to regulations and how real estate investors can structure deals to minimize their tax bill. The managing partner at my firm, however, knows all about this. He has a degree in accounting and spent 9 years working at Deloitte. Our skills complement each other. I can focus on growing the business, while he can help our clients with complicated questions about tax laws.
By having your weakness covered, you’ll ensure that your business can reach its full potential. A smart partnership will expand your reach, network, and capabilities – so your alliance is more effective than if you were running the agency by yourself.
Agreement on business operations
Having complementary skills means nothing if you can’t agree on how to do things.
Some of the main things you need to discuss with any prospective real estate business partner early in the vetting process are:
- Long term professional goals
- Exit strategies
- Investing process
- Tasks distribution
- Risk management and risk comfort level
- Financial commitment
You’ll be working together and depending on each other to take the business to the next level. If you can’t agree on the fundamentals of how to run an agency, it’s best to keep looking.
Strong social skills
Real estate is a people business. Your agency is only as good as the relationships you are able to establish and nurture.
Therefore, it’s important that your partner has a positive attitude. He or she should be easy to work with. Trust me. Employees and clients will appreciate this!
In theory, this advice sounds intuitive. But in practice, it’s hard to know what it will be like working with someone from just a few short conversations. How will they respond when faced with adversity? Do they lift up the people around them?
It’s a good idea to speak with references. It’s worth the extra effort. You want to hear the perspective from someone who has worked with the candidate you are considering. This will help you better understand his or her social skills and ability to work well with others.
Shared goals and timelines
You and your partner should share the same goals and timelines. If you have different visions for the future of the company, then you’re bound to run into problems down the road.
For example, perhaps your goal is to dominate the local market in one specific city. But your potential business partner wants to expand to other regions. Or perhaps you plan on selling the business in a few years, while your partner wants to run the company until he or she retires.
Fortunately, situations like these can be avoided. Find someone with similar goals for the company, and you will ensure a better fit for your agency.
In my experience, one of the most common factors in business partnerships that don’t pan out is a difference in work ethic. If one partner is working harder and dedicating more hours than the other, sooner or later there will be resentment. No one wants to feel they are carrying someone else on their backs.
I’ve been fortunate to avoid this scenario. However, I’ve seen the impact it has had on other realtors. It can potentially ruin your agency. You want a business partner who works hard. They should challenge and motivate you.
Reliability and Integrity
Of course, you need to be able to trust your partner. If he or she doesn’t have a strong work ethic, you don’t want them in your business.
A business partnership has significant legal and financial ramifications. Choosing poorly could damage your reputation, finances, and future growth opportunities. Always prioritize honesty and ethics. You don’t want to have someone on your side who is known for shady dealings or unfair practices.
Industry knowledge and experience
At this point in your career, you’ve probably invested a lot in your career. You’ve earned your real estate license, likely read hundreds of articles and books, closed many deals, and lost a few too… but you have valuable, real-world experience that makes your agency what it is today.
But not everyone’s the same. A person may have years of experience, but that doesn’t mean he or she will be knowledgeable about your real estate niche.
- Do they know the difference between condos or co-ops?
- Have they closed a significant number of transactions before? At what price points?
- Do they have a genuine understanding of the properties and neighborhoods you’ll be focusing on?
I’ll go back to my own agency. We cater primarily to people looking to invest in luxury real estate. So our clientele is a lot different than an agency that works with families looking to invest in starter homes. it was important I partnered with someone who has experience consulting high net worth individuals and working with family offices.
The Benefits and Challenges of having a real estate business partner
A partnership can be the best move to push your career forward, but you’ll want to carefully consider the pros and cons before you commit.
|More capital to work with||Earnings must be split|
|A bigger network of investors and opportunities||There could be a disparity in equity or experience|
|More point of views: better choices||Challenges with task delegation|
|Motivation and accountability||There can be arguments about how to run the business|
|Shared risks||Some decisions may take longer|
|Twice faster workflow|
If you take the earlier ‘self-review’ questions to heart and enter into a partnership with clarity and a clear understanding of what each of you brings to the table, almost all of the ‘cons’ can be largely avoided. You’ll be able to reduce the risks, scale your business faster, and enjoy an expanded professional network that can deliver greater earnings and career advancement for both of you.
Working as a realtor is about investing and relationships. Sometimes the best investment you can make is having the right partner at your side.
Disclaimer: This guest article was written by Ricardo Mello. Ricardo is the co-founder and Managing Partner of Manhattan Miami Real Estate. He helps clients all over the globe invest in luxury properties in NYC and Miami. His work has been featured on Inman, Realtor Magazine, and NextAdvisor.
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