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The Partner CHEAT CODE

I'm passionate about partnerships, but not necessarily in the way that you might anticipate. Because I have had a partner, a business partner for a long time, and it's gone great. But I've had bad partnerships too, and I've seen both sides of it. And because I have a business partner and have had one for a while, I get a lot of questions from people about my partnership.

When I show up at events or our masterminds and things like that, partnerships become a question that I get because like I said, I've had this partnership for a while. It's been very successful and people want to know, but it scares me because we talk about KPIs, we talk about sales, we talk about marketing, we talk about hiring, and there's a lot of important surrounding all of those subjects. But I think what people do without a whole lot of research and without a whole lot of thought, is they jump into partnership.

So I want to talk about that today because I'm positive some of you that have either thought about partnering, are currently thinking about partnering, or someone is bugging you to partner.

I guarantee it. I guarantee you fall into one of those categories. So I want to talk about how to create those partnerships, make them powerful, and how to avoid the disastrous ones…

…and they can be disastrous.

Risk Tolerance

When considering taking on a business partner, one of the most important factors to assess is risk tolerance. This refers to the level of risk that an individual is willing to take when it comes to business decisions and investments. In order to have a successful partnership, it is crucial that both parties have a similar risk tolerance.

Here are some key considerations when it comes to risk tolerance:

• Understanding individual risk tolerance: It's essential for both partners to have a clear understanding of their own risk tolerance. This involves evaluating how comfortable they are with taking risks, whether they prefer conservative or aggressive approaches, and their attitudes towards uncertainty in business.

• Aligning risk tolerance: Once individual risk tolerances are understood, it's important to align them. If one partner is extremely risk-averse while the other is highly risk-seeking, it can lead to conflicts and disagreements in decision-making. Finding common ground and ensuring a shared approach to risk is crucial for the success of the partnership.

• Assessing risk management strategies: Partners should also discuss and agree on risk management strategies. This involves evaluating how risks will be identified, mitigated, and managed within the business. The partnership should have a clear plan for handling risks that aligns with both partners' risk tolerances.

Ultimately, having a shared risk tolerance can contribute to a more cohesive and synchronized partnership, reducing the potential for conflict and ensuring that both partners are comfortable with the level of risk involved in their business endeavors.

Alignment of Goals

When considering a business partnership, it's essential to ensure that both parties have aligned goals and aspirations for the business. Here are some key aspects to consider:

Long-Term Vision

Partners should have a clear understanding of their long-term objectives for the business. This involves discussing factors such as growth, expansion, and potential exit strategies. If one partner envisions rapid growth while the other prefers a more gradual approach, it can lead to conflicts and disagreements.

Financial Objectives

Discussing financial goals is crucial to ensure alignment. Partners should have a shared understanding of their financial expectations, including investment levels, profit distribution, and long-term financial stability. Misaligned financial objectives can lead to disputes and hinder the progress of the business.

Personal and Professional Development

Understanding each other's personal and professional development goals is important. Partners should discuss how the business will contribute to their individual growth and how it aligns with their personal aspirations. If one partner seeks rapid business growth, while the other prioritizes work-life balance, it can lead to dissatisfaction and tension within the partnership.

By ensuring that both partners have aligned goals for the business, it sets the foundation for a successful partnership, minimizing the risk of conflicts and disagreements.

Common Hunger

Common hunger refers to the drive and work ethic that both partners bring to the business. It's essential to ensure that both partners have similar levels of commitment and dedication to the business in order to avoid conflicts and disagreements.

Work Ethic

Partners should have a shared understanding of the amount of time and effort they are willing to invest in the business. If one partner is willing to work long hours and weekends while the other prefers a more relaxed approach, it can lead to tension and resentment.

Commitment

Having a common hunger also involves a shared level of commitment to the success of the business. Both partners should be equally dedicated and motivated to achieve the goals and milestones set for the business.

By ensuring that both partners have a common hunger for success, it creates a cohesive and cooperative environment, reducing the potential for conflicts and ensuring that both partners are working towards the same objectives.

Complimentary Skill Set

When considering a business partnership, it's important to assess the complimentary skill set of potential partners. This involves looking for individuals who possess different skills and expertise that complement your own, contributing to the overall success of the business.

Diversity of Skills

Seek partners who bring a diverse set of skills to the table. For example, if you excel in marketing and sales, look for someone with strong financial or operational expertise. This diversity allows for a well-rounded approach to decision-making and problem-solving within the business.

Collaborative Abilities

Partners should be able to collaborate effectively, leveraging their respective skill sets to drive the business forward. This involves open communication, mutual respect, and a willingness to learn from each other's expertise.

Adaptability and Flexibility

It's important to find partners who are adaptable and flexible in their approach to utilizing their skills within the business. This allows for seamless integration of different skill sets and the ability to pivot when necessary to address business challenges and opportunities.

By seeking partners with complimentary skill sets, you can ensure that the business has all the bases covered, minimizing potential gaps in expertise and increasing the overall potential for success.

Final thoughts

If everything else checks out, risk tolerance, common hunger, all the things that I listed, but your gut is screaming that something isn't right, don't do it. Trust it. Sometimes your gut will keep you safe, so trust your gut. At the end of the day, it's not about just checking boxes. If your gut's saying, don't do it, at least tap the brakes. Think about it, okay? Don't just do it because you need help. Needing help is why you hire people. You partner because you want one plus one to equal eight or ten.

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US Housing Shortage and Market Impact

Housing Shortage History

In recent years, US house prices have risen for various macroeconomic factors. Demographics, Federal Reserve zero interest rate policies, and government stimulus all play a role. Housing shortages are a major factor. Houses are few in the country.

Housing shortage worsens

The US housing crisis is worsening, according to realtor.com. The housing scarcity may impact the residential housing market for years or decades, according to this data.

Understanding the Housing Shortage
 
To understand the housing shortage, let's look back in history. The shortage is due to the 2008 financial crisis, housing crisis, and recession. This period saw many housing industry failures, particularly builders and construction firms.
New housing starts in the US are shown in the chart below. According to the graph, new house starts plummeted during the financial crisis and took years to recover.

Catering to Demand: Completed home units vs. household formation 

The US built 13.4 million homes between 2012 and 2023. Of these, 9.5 million were single-family dwellings, which are popular. At the same time, 3.9 million multifamily units were built.
These numbers may appear high, but they must match demand. Analysis of household formation is better than population increase, which doesn't indicate housing demand. Number of people or families seeking homes is called household formation.
The US formed 17.2 million households between 2012 and 2023, surpassing housing units completed. More demand than supply suggests a home supply shortfall. As people fight for scarce homes and rentals, housing prices rise.
For almost a decade, the housing shortage has contributed to the rapid rise in home costs.

Housing Shortage Status

Single-family home development dropped 6% in 2023, according to realtor.com. Compared to the 2010s, this decline isn't severe. Mortgage rate increases cause builders to lose confidence and build fewer houses, impacting affordability and demand.
The number of multifamily construction starts has decreased this year. In 2024, greater deliveries indicate that projects started in prior years are being completed. While this reduces the multifamily housing shortage, it remains severe.
The housing shortfall has grown from 7.3 million to 7.5 million, according to Realtor.com. Some sources have somewhat different numbers, but the housing shortfall is persisting and likely worsening.

Housing, investment, and rental implications

Nationally, the housing shortage will raise prices. Mortgage rates and the economy can offset this pressure, but the lack of home supply is projected to raise house prices in the near future.
The housing market is localized, therefore conditions may differ by region. High housing and rental prices result from household growth outpacing development permits in many regions. Some of the top metros witnessing this issue are San Antonio, Austin, Deltona, Daytona Beach, and Allentown.
It's hard to anticipate the housing market's future, but the housing shortage hurts homebuyers and renters. The gap will affect home affordability and access as long as it exists.

Conclusion

After the 2008 financial crisis, the US housing scarcity has persisted. Even though millions of housing units have been built, household formation has outpaced supply, exacerbating the shortfall.
Current data from Realtor.com verifies the housing shortage and shows it will increase. While not the main cause of increased property prices, the shortage does contribute to market pressure.
Due to the housing shortage, homebuyers, investors, and renters can expect higher costs and more competition for limited housing. The national ramifications are evident, but the housing market's regional peculiarities must be considered.
We hope this research clarifies the US housing issue. How has a housing supply shortfall affected you in your market? Let us know in the comments. See our podcast, "On the Market," for additional housing and economic facts.

never have to explain your wholesale closing process to a buyer againnever have to explain your wholesale closing process to a buyer again 

My company has done over 800 wholesale transactions in the last eight years. One of the biggest pain points we had early on was having to explain our process to every single buyer who called us about a property. We might get 20 calls or emails about a certain property, and that's 20 times we would have to explain our process. If that's not bad enough, oftentimes buyers simply forget and they ask you to explain it again a few days later. After going through this a few times I created our Buyer Closing Process PDF.

This simple PDF would allow me to say to them:

“I will go ahead and e-mail you our process so that you can review it and become familiar. Please let me know if there's anything that you need clarified that is not on that PDF.”

And when things were asked that were not on the PDF I simply added them so I didn't have to answer the question for the next person.

That is my download for this week. I think this is an invaluable time saver to give to buyers so that you're not answering the same question over and over again. Obviously feel free to use it as is or modify it to fit your business process.

The link below will take you to the Google doc. You will be prompted to make a copy of the document. This is just so that you don't accidentally modify the original and you can save it to your own Google Drive!

Get this week's 👉🏻👉🏻 download here

DISCLAIMER: This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.