The following Q&A was completed as part of our conversational Commercial Real Estate FAQ Interview Series, we hope you find it helpful.
When avoiding costly or painful mistakes, make sure to take a good look at your partners, your partnerships, and your partnership agreements. Having a great partner is something to strive for, but having a not so great partner or partnership agreement can be a mistake you’ll pay for in your commercial real estate investments. Focus on tight operating agreements and remember that good fences make good neighbors as the same rings true in commercial real estate investing partnerships.
Richard Wilson: What is the most expensive or painful mistake that you have made in the commercial property investment area that by sharing it maybe somebody could relatively easily avoid making that same mistake?
Ben Marks: We’ve made a lot. I would say probably the one that sticks out most in my mind is not having the right partner. And we learned the hard way. Partners are great, until they’re not, and that’s why really tight great operating agreements were – we don’t take, we don’t leave anything to chance, everything is spelled out. In terms of who’s collecting, simple stuff that sounds obvious, we want to understand that upfront and we’ve had cases where we’ve had very tight operating agreements and partners we’ve approached just wouldn’t assign them and that was, we found out later that was probably a good thing. So I’d say having the right partner, having very tight agreements having good fences make good neighbors I think is absolutely true in this business when it comes to partnerships in commercial real estate.
Richard: Right, right. I think that’s a really good piece of advice to tell people that hasn’t been shared in any other of these interviews. That’s great.