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