The power of partnerships. This week we're focusing on the power of partnerships and how they can lead to better risk weighted returns for your investment. We ask: Why are partnerships important? How can they make a difference? And how can they impact your life as an investor? Jump into this quick blast of free education on how you can create and improve your investing partnerships which will ultimately result in higher returns!
The power of partnerships. This week we're focusing on the power of partnerships and how they can lead to better risk weighted returns for your investment.
We ask: Why are partnerships important? How can they make a difference? And how can they impact your life as an investor?
Jump into this quick blast of free education on how you can create and improve your investing partnerships which will ultimately result in higher returns!
KEY TAKEAWAYS
1. Partner with someone who has a great track record, unique abilities that you don't have and strengths that compliment your weaknesses.
2. Someone with a track record and experience is going to foresee challenges arising and be able to steer you to safety during your investment.
3. Look for a diverse set of strengths in a partnership team and understand who is playing which role.
4. By creating a solid team partnership you're able to drastically reduce execution risk.
LINKS
Learn more about investing with Steven at https://theinvestormindset.com/invest
Title: The Power of Partnerships
Host: Steven Pesavento
Duration: 12:04
Narrator (00:00):
It’s wonderful that so many of you have stepped up and registered to partner in future multifamily opportunities together. We follow a very strict vetting process when selecting our operating partners and all of which have a serious track record, at least five years of experience, at least 2,500 doors that they've actually managed and owned. And over $250,000 of assets under management, these kinds of guidelines help make sure that we are investing together in some phenomenal deals. And you can learn more by registering at theinvestormindset.com/invest. These institutional silo investments bring benefits to busy professionals and real estate entrepreneurs looking to reduce their taxes and increase the returns. And you can join us by getting started at theinvestormindset.com/invest. I look forward to seeing you on the next deal.
This the investor mindset podcast and I'm Steven Pesavento for as long as I can remember, I've been obsessed with understanding how we can think better, how we can be better and how we can do better. And each episode, we explore lessons on motivation and mindset for the most successful real estate investors and entrepreneurs in the nation.
Steven (01:17):
Welcome back to this week's mindset minutes episode on the investor mindset podcast, and I'm your host, Steven Pesavento. And each week I share mindset tips and investing strategies to help grow your business and take your life to the next level. This week, we're focused on the power of partnerships and how they can lead to better risk weighted returns for your investments. Join us each week as we share more tips and strategies to help you reach your true financial freedom through real estate, by hitting that subscribe button and let's get right into it. So, the power of partnerships, why are partnerships important? Why do they make a difference and how can they impact your life as an investor? So, regardless of if you're looking at investing from a perspective of being an active investor, somebody who is going to go out and buy and own property themselves manage and do that work, you know, they've got the extra time to go out and do that. Or if you were to be in the passive perspective where you're going to be focused on your main career, your main income earning source, while investing to create passive income by partnering with experienced operators, whatever way you look at it from both the active and the passive perspective, partnership is powerful. And some of the reasons that partnership is so powerful is because when you're able to partner with somebody, who's got a past track record, who has unique abilities that you don't have, who's got strengths that really fit well with your weaknesses, you can move forward much faster. You can have much more success and you can greatly reduce the overall risk of an investment.
So, you know, when I'm looking at this, both from an active and a passive perspective, but especially from a passive, one of the things that I really look for is I am always looking for a partner who's got an immense track record. Somebody who's got a long list of experiences in the space that we're investing in, and that are bringing that experience directly to the table in the deals that we're doing together. Because when somebody's already done something one time, two times, five times, 10, 15, 50, and so on, they've gone through it. They start to build that muscle memory, and they also start to be able to foresee where some of those potholes are going to be in the road. So they're able to see some of the challenges that are going to come up as we're doing this investment together, and they're going to help steer us away from some of those potholes and make sure that we're going in the right direction. You know, it's, it's that experience of losing money or that experience of failing or running into a challenge or running into an issue with contractors that, you know, ends up leading you to have the experience of knowing, Hey, well, how am I never going to avoid that again? Or if I do experience it, how am I gonna be able to move forward in a much more effective way. Experience is what builds that you can learn through other people's experience. I'm a big believer in modelling, I'm a big believer in firewalking people's experience, truly feeling it on an emotional level, what that difficult time felt like, so that you can feel it and, and vow to not have to go down the same path, but there's nothing that replaces actually having gone through it yourself. And so, that's why a track record is one of the things I always look for in any of my operational partners. You know, a little story here. When I started investing in real estate, I started with no experience, you know, at the time I didn't realize that I already had been investing by managing multiple Airbnbs and making a good little income off of it. But when I started, I didn't have any experience. I didn't, I didn't know the business, but what I did know was that I was an absolute expert marketer. I knew how to communicate with people really effectively, I knew how to sell, and I knew that I had the hustle, I had the grit to be able to push through and do whatever it took to make those deals come. And so I ended up finding this phenomenal partner who had already been through some of those trials and tribulations and had the experience that I was looking for. You know, he had flipped hundreds of homes. He had built hundreds of homes and he had been through the 2008 crash and lost tons and tons of millions and millions of dollars. As a result, he learned a lot through that process about things to avoid and how to avoid dealing with that again. And so what a perfect partnership. It was one of the reasons I was able to scale up to doing 200 plus flips in my first three years was because I had a phenomenal partner and I was able to take on the responsibilities that really fit me well and my strings and he was able to fit into the areas where he was really strong and fit well with his strings. And one of the reasons we partnered was because of that track record, and one of the reasons he partnered with me because of the strengths and some of the unique abilities that I had.
So, the second thing that I think is really important to look for in a partnership is really being clear on who's really, really good at what. I think it's really hard sometimes for people to be honest with themselves and say, Hey, I'm not really very good at that, or I'm not really good at this, but I'm really, really good at this and I am absolutely amazing at this other task. And so, when you can get really clear for yourself on what you are the best at, you can start to understand the type of people you want to partner with to help ensure that you're making those right decisions.
So from a passive investing side, what I'm looking for here, when I'm choosing operating partners that I'm going to invest with, what I'm looking for is that the team itself has a diverse set of strengths. That could be one or two people on the, on the partnership team that has hired other folks that are going to be, you know, vendors per se, or, you know, other folks that are going to be coming in, lawyers, CPAs, everyone in between or it could be a larger sponsorship team where each person has their specific role and that's what, they're the best at. The key thing that I recommend looking for is understanding who is playing what role and do they have the strengths to meet that role? Like, for example, for me, I am phenomenal at communicating really clearly and effectively. Really being able to communicate difficult or sometimes, confusing complex topics in a way that's very simplified and makes it really easy for just about anybody to understand. And so, that makes it really great for me to work directly with investors, because I love communicating with people. I love being able to help people kind of reach their financial freedom and goals and so when I'm working with an operating partner and they're just not there, they don't love that part of the business, but they absolutely love the numbers or they absolutely love the operation side, it's a match made in heaven. And so I would look for those kinds of things when you're looking at partners to invest with, because that will help kind of make sure there's synergy on the team to really be able to move things forward.
And the last thing is that by focusing on partnership, when we can bring that experience and track record together, when we can bring those unique skills and abilities, we can bring the ability to marry those together into one strong team, we're able to dramatically reduce execution risk. And here's why, because when we're going out and we're buying a 220 unit apartment building, or, you know, a hundred unit townhome complex, what you're going to notice when we're buying these kinds of buildings is, it's a simple idea to purchase the property, but it's a complex business to run effectively because there's a lots of little small things. So when we're able to marry the right strengths with the right track record together, that helps us make sure that we're able to execute effectively, that we've got the right contingency plans in place that we've been through this experience before. So when we go to the property, you know exactly what to look for, and we know exactly what signals are going to tell us that something's wrong. Is there a property manager who is not serving our needs as an investor? Are they just putting in any tenant that's possible? Are we going to a property and has it not been properly maintained? And you know, is that an opportunity for us to add value if we purchase it at the right price? Well, these are things that experience brings and when you bring in those strengths and those unique abilities and bring those together, you're able to end up having some phenomenal success.
So, in summary, partnerships are extremely powerful, both for active investors and passive investors. So, I highly recommend that if you're just getting started or you've been in the business a really long time that you look out well, Hey, how can I add value to somebody else's world? And how can I focus on doing the thing that I'm the absolute best at and work with someone else who's the absolute best at the thing that I'm not? And together you're able to scale much more effectively.
If you're a passive investor, you want to be investing with people who've got a track record and teams that have that track record, that can go out and buy these properties. Because it's a complex business. It's a business that requires a certain level of expertise and you get to take advantage of that expertise by putting your capital with those people and all benefiting from that in the end.
So, thank you guys so much. I greatly appreciate your participation engagement here. Make sure you hit that like button makes you hit that subscribe button and if you've been listening for any period of time, I highly encourage you to drop us a five-star review. It helps us reach more people. It helps us make a bigger impact. And if you're looking for more information on passive investing, we've put together the ultimate guide on passive investing, just head over to theinvestormindset.com/passive. You can put your information right in and you'll be sent, immediately. that guide. It's a summary of all the information that I've been able to learn and study after interviewing hundreds of the best investors out there. It's something that I think you're gonna find really valuable. So, I'll leave you as I always leave to live a life with inspiring others, and you can do so today by taking action by going out and finding people that you can add value to by building partnerships and by investing together so that we can all succeed and do the right thing in the world. So thank you so much. And we'll see you guys next time.
Narrator (11:36):
Thank you for listening to the investor mindset podcast. If you like, what you heard, make sure to rate, review, subscribe, and share with a friend, head over to theinvestormindset.com to join the insider club, where we share tools and strategies from the top investors and entrepreneurs and how to take it to the next level.