Rule #4 - Partners Is A Dirty, Dirty Word

Since Cain killed Able human beings have been unable to see eye to eye... and it's all gone down hill from there.

Partnering up with someone is only one step further into the fray.

There are many positives going through your head about partners-

Partners divide risk. Partners are sounding boards. Partners bring fresh points of view. Partners will do half the work. Partners bring skills.

The truth is taking on a partner is a fear based decision that can be overcome in other ways.

People usually take on partners b/c...

-their confidence in what they are doing is not great

-they are not sure of their own abilities to get the job done

-they don't know where to turn if times get desperate

-they won't have to do all the work

I had a partner on my first property. I wanted to divide the risk since it was my first house. I wanted someone to look to when things got bad and HOPE they knew what to do next. I wanted the skills they brought to the table to save us money while we did the work (see lesson 3).

In the end, a lack of communication, different ideas on how things should be done, effort extended and a HOST of other reasons taught me the reason I brought him along was b/c I was afraid.

I've watched too often as differences in opinion, personality and strategy tear partners apart and ruin a perfectly good idea and/or business.

Then what is the solution?

If you are going to do this you will absolutely need to surround yourself with competent individuals and mentors who will be there when you have questions. When you get into trouble you can turn to them and ask what they think you should do. Check out your local REIA or online message boards.

You can hire a mentor to guide you. Many of these people for a fee will walk you through each step of your scenario.

Plan ahead and educate yourself. You can combat fear (which is many times just the unknown) by giving yourself reasonable guidelines to meet and material that will give guideposts as you go along.

Within the first month I found myself realizing it wasn't answers I was lacking, but the infinite number questions I didn't know to ask. You can't get the answers you need if you don't know the questions to be asking.

I would recommend getting to know a confident, seasoned individual WITH SCRUPLES who will be happy to walk beside you until you get your sea legs.

Until then, get the flip out there!

Rule #3 - If You Can't Cut A Check You Shouldn't Be Doing It

This rule is a bit confusing when said so I need to clarify it since it is one of the most important.

I do not use my own money to rehab homes. I do not use my own money to buy homes. My money stays in my pocket to buy things for me. Not houses.

Use other peoples resources. Banks, loan sharks, credit cards, home equity lines and private lenders are many ways to do this. In the end, whoever you pay the least amount of money to or fits your scenario best is who you should use.

Do NOT use your own money. I don't even recommend using your friend's or family's money. Unless they understand your business, and it is likely they don't, it is inevitable that they will always be wondering what you are doing with the cash.

The second part of the statement "...You Shouldn't Be Doing It" means if I catch you spending your time using a hammer, paint brush, drywall, tile... ANYTHING that can be done by a paid employee... is grounds for a stiff smack across the face.

Say this to yourself... you are NOT a drywaller. You are NOT a painter. You are NOT a carpenter. These are jobs that you pay people to do while you go find another job for them to work on.

"But I'll save money if I do it myself."

SMACK!

No... you spend your TIME saving hundreds when you should be out looking for deals to make you THOUSANDS. Spend the money and do it right the first time. YOU go out and look for another deal.

Those ridiculous shows on TV show people doing all sorts of work when they should be looking for another property. Working on the house will at the very least wear you out. At the worst, it will burn you out.

So really Rule 3 should be called "Contractors Work On Houses, I Do Not" or "Subs Make Hundreds, I Make Thousands"...

As you can see, I need a new way to state Rule #3. What are your thoughts? What should I call it? Leave your comments below!