The distance to me is of much less concern that bringing your friends into a partnership that is almost gaurenteed not to last.
Partnerships tend to break up. Few make it. They are good for emotional support in the beginning but when the money starts flowing in or the work load starts becoming difficult, time consuming or frustrating, I suspect things will change rapidly and dramatically.
Sounds like you will be doing most of the work. When you find yourself working on this 30 hours a week, evenings and weekends, you run into frustrating periods, and you feel like you are doing all work. Or if all of a sudden you discover this is a lot easier than you ever realized and you make a couple hundred thousand a year on YOUR efforts.
How will you THEN feel about being in partnership and giving half of the money to someone in California, who you no longer feel has contributed much.
Ask yourself the tough questions before you partner, create an exit strategy written by an attorney. This will force you to think about what you will do WHEN the point of disagreement comes.
I have gone through a few “partnerships” and lost a few friends in the process. I dont reccomend them.
If its emotional support (which is extremely important in the beginning)you are each looking for, I would suggest you both start seperate businesses. Plan out your goals and then you “meet” regurlarly to keep each other on track, help each other, share ideas and things you learned. A much better way to maintain a friendship.
I prefer partnering on specific projects to having someone as a “PERMENANT” partner.
My good friend and I are in the planning stage of creating a partnership between he, his fiancee, and myself to purchase property. Some we will buy and hold and others will be rehabs to flip. However, my friend lives in California now and I’m in New York. We have very good communication and obviously, there is email and phone/fax communications, but does anyone out there feel that people in partnerships should live near each other for it to work.
I will be the managing partner as the property will all be located in my area of NY and I’m putting the deals together. My friends are not necessarily the money partners we are just joint venturing to purchase property understanding that it would be easier to do this together then separtely. No one has much cash right now. They have the better credit, I have the higher salary and longer work history as I am older and I have been in my profession for 13 years. Any thoughts on the distance matter?
I agree with Dell(OH). Partnerships are usually NOT a good way to go. He suggests being supporting each other, but being independent, by having your own projects. I think that is excellent. Also, nowadays you have this CREONLINE.COM website to communicate with and get suggestions from investors, some quite knowledgeable.
Jack Reed on his www.johntreed.com website has some free articles on real estate investing, including a discussion of partnerships. You might want to read his views.
Good Investing*************Ron Starr*****************