| We were looking for real estate partners because | | | | low. |
| we were new to the Tucson area. We found that | | | | There were plans and new plans, and weeks of |
| two identical houses here can be $50,000 apart in | | | | stressful anticipation evolved into stressful worrying. |
| price if they are three blocks apart. Also, the styles | | | | We discovered that the houses in the area were |
| are different from anything we had in Michigan, so it | | | | selling for less than we initially thought, that the rehab |
| would be good to have some help figuring value and | | | | cost would be more than we thought, and that all |
| what buyers want. | | | | the other partners expected to do much of the |
| At the Arizona Real Estate Investors Association | | | | labor, rather than hire it out. The profit projection |
| meeting I announced that we had money to invest in | | | | dropped from $25,000 each to $10,000, and we felt |
| fixer upper real estate, and we were looking for | | | | there might actually be a loss. |
| partners. The host wrote our names and phone | | | | We dropped out of the deal. Fortunately the other |
| number down on the overhead projector along with | | | | partners had procrastinated for several weeks on the |
| the others. About three days later we got a call. | | | | signing of the joint venture agreement. They also |
| Sam and Nikki were nice people, and we got along | | | | were decent people, and had noticed our anxiety. |
| well when we met. Their offer had been accepted | | | | Nikki called to suggest we let them find a way to |
| on a house. Looking at the comparison sales they | | | | finance it without us, about two minutes before I |
| had found, it seemed like a good buy. They had done | | | | was going to call to say we were out. It ended |
| rough estimates of the rehab and remodeling costs, | | | | amicably. |
| and it looked like we could make some money. There | | | | We learned a lot. I've had partners before, but I let |
| would be a third couple involved, so the expected | | | | the partner take my money and do his thing to |
| $75,000 profit would be split three ways. Agreeing in | | | | make us a profit. This group decision-making, |
| principle to the deal, we arranged to meet the other | | | | especially with so large a group, just doesn't work, at |
| partners at the house after closing. | | | | least not for my wife and I. One day, standing in a |
| Too Many Real Estate Partners | | | | Home Depot hopelessly looking at carpeting samples, |
| Six people with six opinions can be a problem. I never | | | | I also realized that non-financial contributions need to |
| understood why the beautiful wood floors had to be | | | | be clearly defined according to each persons |
| torn up and replaced with carpet. For that matter, I | | | | knowledge and skills. |
| never understood why they couldn't at least be | | | | We truly hope they make a lot of money on the |
| carpeted over without the expense of tearing them | | | | project. If they do, we may even be willing to be |
| out. Both my wife and I thought it was a crime to | | | | partners with one or the other of the couples. If so, |
| stucco and paint the beautiful brick exterior of the | | | | though, we'll just look at the plan, put up the money, |
| house, but were assured that buyers here would like | | | | and let them do their thing. That's my idea of real |
| that better. Raising the roof of one room seemed | | | | estate partners. |
| expensive and unpredictable, but the ceiling was a bit | | | | |