Welcome back to the second episode in our new series “Ask an Investor.” We’ve found that a lot of people have the same questions, so the goal of this series is to bring in other investors to have conversations and answer those questions in real time.
Our guest today is Catie Lawrence who recently left her W2 job to be a full-time real estate agent and pursue investing. She and her husband, a general contractor, live in Arvada and specialize in flips and BRRRRs. She has a lot of questions about partnerships and lending that we explored in-depth.

- Listen to the podcast “#53: Using Partnerships to Scale Your Real Estate Business” on the Colorado Springs Real Estate Investing Podcast or #318 on the Denver Real Estate Investing Podcast
- Watch the YouTube video (at the bottom.)
- Read the blog post. Note, the blog is an executive summary. Get the in-depth breakdown from the podcast or video.
Since we use our own capital and financing, we’re generally stuck doing one project at a time. Does it make sense to look into partnerships so we have the ability to act on good deals when we see them?
Catie and her husband use their own capital to invest, usually with a HELOC or cash out refinance. They typically only do one project at a time because all of their capital is wrapped into one project. Often, she’ll see a good opportunity but doesn’t feel she can act on it, because hard money lending is her only option. She would like the opportunity to be able to jump on something quickly and having an established partnership seems like the best way to scale.
She’s hesitant about hard money lending, because she thinks a partnership could be mutually beneficial and that having a relationship with someone would be more appealing. Since her husband is a contractor, she’s an agent, and they’ve established a track record through their flips and BRRRRs, they bring a lot to a potential partnership. They could help someone new get into the real estate investment space and help better the community by providing a nice place to live.
Jenny says: We could go in a million different directions here. Something that comes to my mind is that there are short term relationships (a flip) and long-term relationships (a BRRRR). There are also debt partners and equity partners. In an equity partnership, all partners are equity owners.
The only person I partner with from an equity standpoint is my husband, but I have partnered with someone from a debt standpoint, who was a family member. I identified a BRRRR property, and the debt partner brought all of the financing for the purchase and rehab. I oversaw the rehab, and I paid them points and interest but for better terms than a hard money lender. We trusted each other, because this was my 10th property and my track record was solid.
Chris says: Catie, you and your husband bring a lot to the table, and a partner would be getting something out of it. It’s worthwhile to create a portfolio to show people what you’ve accomplished.
Should I get a lawyer involved when writing a contract?
Jenny says: My advice is to always get a lawyer, though admittedly I didn’t in the case of my family member partnership. I did tweak a contract that I’ve used with a hard money lender to ensure there was a contract in place. I also filed the note with the county and did everything to the letter, because the last thing I would want to happen is to have a disagreement when family or friends are involved.
Chris says: I would always involve a lawyer, because I’m not that detail oriented. A lawyer can go through the contract and make sure everything is considered and covered. Talk to someone sooner rather than later to draw up the documents. It’s kind of like figuring out the lending before you find the deal.
I’m very debt averse, so a debt partner sounds a little less risky than a hard money lender. What do you think?
Jenny says: I like hard money lenders because they provide a second set of eyes, and they won’t lend if it’s a bad deal. The first time I went to a hard money lender I was nervous because I was pretty sure I had a good deal on my hands, but I wasn’t positive. They approved the paperwork right away, and I know they wouldn’t lend me $100K if they didn’t think they would benefit. You don’t need to have a specific property in mind, but you can tell them what you’re looking for, get pre-approved, and then submit the proposal when you find the right property.
Chris says: I’ve gotten fixated on finding a partner, too. But the more I thought about it, the more I realized that I didn’t need a partner—I needed a hard money lender. Lenders have done these transactions multiple times; it’s harder to find a good partner than it is a lender, and the relationship remains strictly transactional. They have all the lawyers and liens in place from the start, and their underwriting is really good. With today’s market, it’s easier to find a lender than it is to find a deal.
How do we create a mutually beneficial partnership?
Jenny says: The skillset you and your husband have is far more valuable than money at this time.
Chris says: I see an opportunity with you and your husband to do partnerships with investors who are inexperienced and may not have the capital. A lot of new investors don’t have experience, but they find properties because they’re hustling and then realize they don’t want to run it by themselves. These investors won’t know general contractors, and the experience you bring is equity-worthy, not just debt-worthy. This is a good way to do projects within your skillsets and find deals.
What lending options are there for someone who just left their W2 job?
Jenny says: Look into non-qualified mortgage, or non-QM, loans. These loans are based on the deal as opposed to the person. You’ll have to Google to find a few, but since you’ve got such a good track record and portfolio, you can probably find something. The terms are generally not as favorable as a conventional lender, but it’s an option. There are a lot of different products: rehab loans, flip loans, and 30-year fixed loans.
Chris says: Go with a local lender for hard money. Talk to them and show them your portfolio, investing business, and your husband’s GC business. Local banks can give you loans you wouldn’t get with a conventional lender.
Should I look into syndications?
Jenny says: I’ve heard that in syndications people will pay very lendable individuals a fee to take out a loan in lieu of equity.
Chris says: That’s common in syndications, especially if you get into bigger properties and non-recourse loans. There are different ways to structure them, and they get tricky when you get into 30-year loans. Syndications are generally used for bigger deals, like a commercial building or retail space with a $15M sales price. There is a general partner running it and investors who are limited partners with equity but no say in the operational stuff. For smaller deals, you don’t need to worry about syndications.
Do you have any partner or lending horror stories? What are the lessons you’ve learned from them?
Jenny says: I made a mistake on my very first hard money loan because I didn’t understand the concept of seasoning. There is a requirement with the bank that you hold and operate a property for a certain period of time before refinancing. Two days before closing on what was supposed to a cash out refi, I was told that I could only do a rate and term refi because I only had the loan for three months. At six months, I would be able to do a cash out refi.
This meant that I had all my rehab and equity stuck in the property for six months. Luckily, I was able to get a renter in there and cover the costs, but it meant I had to pass on a couple of projects. It was very disappointing, but a good lesson learned to have a lender in place first and understand all of the terms.
Chris says: I’ve partnered with people in business and real estate deals; my view on partnerships is that they’re as serious as a marriage. I’ve had some bad partnerships where assumptions were made on both ends, and life changes happened to my partner that left him unable to continue.
The lesson I’ve learned is to limit partnerships, and when I do enter into them, make sure they’re synergistic. There needs to be a big value add—1 plus 1 has to equal 3. If each person brings a different skillset to the table and you can’t do the project without someone’s help, then it’s probably a good idea to partner. Everything needs to be written with clear expectations of responsibilities, how decisions are made, and what to do in the event of death or disability.
Connect with Catie
If you’re interested in partnering with Catie or learning more about her work, you can connect with her here
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Using Partnerships to Scale Your Real Estate Business
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