Flipping A House With A Partner – Pros And Cons
Investing in real estate can produce huge profits. This, however, depends on how the investor handles his properties. In flipping homes, there are some investors who have become hundreds of thousands or even millions of dollar richer just by working independently while there are also other flippers who worked with partners and became successful in their endeavors. So you may ask which is better – flipping on your own or with a partner?
There are advantages and disadvantages when flipping with a partner. For the positives in having a partner to work with, the first one would be having two points of view in any endeavor. Is not it that "two heads are better than one?" This situation would be beneficial notably if the two people involved share a common goal and business ethics.
For novices in home flipping, they would possibly feel more confident about doing their projects if they have a companion. In this way, one of them can get the other's opinions on the work they have to do before coming up with a final decision.
Concerning finances, a big plus here is the fact that one does not have to spend so much for their startup projects as there is a partner to share the capital with. Oftentimes, profit sharing is 50-50 in partnerships especially if both equally shared the initial capital.
Having a partner would also make renovation works easier as one does not have to do it alone. In other words, there's a division of labor and the work can be completed faster than expected. This situation, of course, is very helpful for both partners.
Another advantage is that when selling time comes, more potential buyers can be reached by the two investors involved. By spreading the word to all the folks they know, the partners can target more people.
A disadvantage of this, though, is that the profits from flipping properties will have to be shared by both partners depending on the amount they have earned from their projects. If the profit is small, then both would get a small amount as well.
Problems may also crop up when the partners have different values âârelating money. This could cause differences in opinion during the flipping projects.
Also, if there's no written contract involved, it would be quite difficult for the two partners to settle the budgets. This is possible especially if one of them in the end becomes so hyper in getting a big share of the profit. Sometimes, it's true that good friends end up being up as arch business rivals to the extent of giving more priority to their financial desires over the solid friendship that they've built.
But in the end, whichever you think has more weight to your situation, it's best that you still consider the pros and cons before making a final decision about whether to flip on your own or partner with a friend or colleague what you can fully trust. Partnerships have their own risks so, ensure that you partner only with a person you know very well and trust the most. And it's very important too that no matter how much you trust your partner you should still consider executing a written agreement to clarify everything from the share of profits or losses, duties, among others. (