Maintaining The Private Money Project Relationship
Chapter M. Protect Yourself And The Deal
Ten Commandments For Building Effective Partner
Communication is the key to a successful relationship between partners. And like steady service
on your car engine, communication will maintain the partnership. In dealing with your partner,
you must have the following:
You have to be accountable to one another. How often are you going to communicate with each
other, about what, about what level of problems or possibility? Is it going to be in writing or is it
going to be in person?
Understanding Of The Timetable
Each of you needs a fairly clear understanding of the milestones and the timetable of the
project. Expect this to be done when, and who does what when and where. How will you
recognize progress or completion? The money person may want a report on different phases of
whatever timetable you agreed to. Now, some people will say," ... just let me know when it's
finished." Bless them. But the point is, as a mouse or as a deal person, you have to do
whatever is going to make your partner feel comfortable not only with the project but with you.
Again, think of it like a business, and you want repeat business. And you want their confidence.
Agreed Upon Goals
Next, when you talk about communicating, you do have to agree on what the goals are. For
example, you go into the partnership arrangement and the initial objective was to wholesale the
property and flip it very quickly. Well, what if you can't? For whatever reason, what if it just
doesn't happen? Obviously, now is the time for the back up plan, the contingency plan. Do you
have one? Who develops it, when?
You have to have trust for each other. But trust is developed by
receiving what was expected, when it was expected. The major world
powers negotiate agreements with each other, and they have to trust
each other that to a certain extent, things will occur as agreed. But
inspection clauses are built in as well. You'll want to keep your partner
informed on a regular basis, because no one wants a big surprise,
especially one that's going in the wrong direction.
In the following dialog, an unexpected circumstance has occurred. Wayne
needs to communicate with his partner Carol.
WAYNE: Carol, we've been in this deal for three months, and we were supposed to
have the house sold within six months, but I got a call last night and there's
been a fire at the house and it has damaged some of the kitchen and
actually it was pretty bad. It went up through the roof, and it's probably
going to delay us completing the project ... it could delay as much as a
month and I know that you would want to know what was going on. Is it a
problem to keep the money out there on the project for the additional
CAROL: What's that going to do to the profits?
WAYNE: It shouldn't change the profit. In fact you would make a little bit more
because you would be getting your same 18% for another month, if you want to work it out that way.
CAROL: Did you have insurance on the house?
WAYNE: Yes, we got the insurance and it's going to cover all the repair work and
the costs of the additional repair work, so it won't be any additional money,
CAROL: 50 all you are asking for is the extra month to hold the money that you
would be paying interest on?
CAROL: Sounds fine to me.
WAYNE: If there are no other problems. I'll get you a letter that gets all of this in
writing. Thank you.
* What they were doing is ongoing communication, updating each other. What Wayne presented was not problematic, except for time. Carol didn't ask if it was going to cost her any more, she
was most worried about the profit.
Maintaining Private Money Project Relationship- Chapter M