Thursday, October 18, 2007

Ooooh! Guns, guns, guns!!

Well, not quite, but that's what it felt like Wednesday night at the first face-to-face meeting I've had with my real estate investing partners in some months.

What was the cause of all the tension? We decided to unwind the operation. After 22 months, a lot of learning, but not nearly the level of progress we had originally committed to, we're shutting it down. Its always an emotional experience to shut down a business. However, the commitment to the original goals, or even modified goals, wasn't there, or at least wasn't distributed evenly.

So why now? Why after 22 months, $11200 invested per person, lots of meetings and gas expenses, 4 properties and the headaches of being landlords, why shut it down now, when we're on the brink? In my opinion, because we've been on the brink for a long time, and in 6 months, we'll still be on the brink.

Last Saturday, at the regular meeting of DC REIA, the leader of the group, Sherman Ragland, said something I wish I'd heard 2 years ago. He said partner, but don't create partnerships. Meaning, find a partner to get the deal done but don't create a structure which marries you to a partner or a group of partners (like an LLC) until you actually have a working relationship with them. If the first, then second, then third project with those partners all work out, then maybe its time to consider formalizing it. Our mistake, as a group, was rushing into marriage, all in the name of being "legal". We see how well that worked out.

So thankfully, with all the heat of the meeting, no one got hurt, no chairs or other furniture were thrown or anything like that. (Although I was tempted.) So now we wind down the operation and we'll find and close our deals in our own independent ways. Its definitely for the better. 5 guys, all with engineering backgrounds, trying to pull together deals, it was like herding cats.

Oh well. Time to move on now.

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