Find out the advantages and disadvantages of using an equity partner when making a real estate investment.
The video also discusses how to find potential partners, due diligence process and what to expect when you are in a partnership.
Transcripts:
Chris Bounds 00:00
How do you feel about using equity partners on a deal? I know Brant, you’ve got some experience with that.
Brant Phillips 00:05
Well, depends on who the partner.
Chris Bounds 00:08
An equity partner and you’re probably gonna get it. It’s like a marriage to a degree.
Brant Phillips 00:14
Absolutely love it. I will say that I’ve had quite a few partnerships over the years, less than 10 by, say, seven or eight. And all of them have worked out well. Like I don’t have any of these really bad horror stories except for one, I’ll think about it. That wasn’t he was criminal. No, forget about- he’s my construction partner on our construction business. But besides that, what I’ve learned is this, that there is some absolutely synergistic things that can happen through partnerships that you just can’t do on your own right.
My first company that I formed was called synergy Real Estate Group. And that was kind of my vision, I realized really soon after I did my 10 refinances. And Fannie Mae wouldn’t give me any more loans. I’m like, I gotta figure something now. And the first thing that came to my mind was through partnerships, right, so I put together three partnerships, my second year in real estate, just to buy rental properties, okay. There’s a lot, there’s power that can come from Equity Partners, okay, you just have to really, really screen these people, right, and you need to make sure more importantly, that you’re doing what you’re supposed to do every day, when you look in the mirror that you’re putting together a good deal.
You know, the viability of that deal, knowing the financials and working your tail end off to perform. And so if you can do that and find the right properties, with the right deals, it can be great. And we’re at really, you know, the the things that are really have been eye opening to me, really more so in the last few years, as you know, I’ve put together some syndication deals, and some my partners are here today. And one deal, for example, came about a couple of years ago, it’s a bit over two, more than two years ago. And my partner brought this to me, and it was a big deal. Kind of scary to me to take down a loan.
And but when we really started looking at it with the power of partners, we brought partners in we closed on this deal, looking at a really, really, really good return. I’ve got a video update, by the way, coming out tomorrow for review, you guys you’re gonna like. And then we did another syndication, we’re looking at doing some more. And that’s just the power of if I was trying to pull this deal off on my own, could I do it? Maybe I could do one of them. But could I do two, three or four or five? Absolutely not. And so for me, it’s like that power that comes in numbers that we can’t do it on our own. But I’ll just tell you guys, this is when I got started. When I started raising private money. When I say got started, I start raising private money. I remember like it was yesterday.
And I started having some people showing some interest, my wife and I known how long I was working, working my tail off on it, trying to get some private lenders to invest with me. And she’s like, man, that’s great. I’m like, it’s great. But same time, I told him like, I kind of feel like the weight of the world’s on my shoulders. You know, I told him like, look, here’s the deal. I’m like, I’m gonna raise this money, I’m gonna do deals, but if anything ever goes wrong, we’ll sell our house.
We live on the streets. I’m gonna pay my lenders first. I just I’m letting you know, I seem a little stressed out. It’s because I’m nervous about it while I’m excited. So I’ll tell you all, do not so I tell all my students like don’t even think about raising a dime, unless you’re going to do whatever it takes to make that deal perform. Right? And that’s like my claim to fame after being 15-16 years in the business. I’ve always performed on everything I’ve done and a lot of times it ain’t been easy, but if you perform you got the right partners. It’s absolutely the gateway to you know, the next level real estate I would say that for sure.