One of the key features of the real estate development industry is the constant need to find and work with partners. It’s rare to have a development project that can be handled by a single company or business entity. Whether the project is a residential building, a mall, or even an auto repair center, having a partner is par for the course.
When it comes to working on large land and real estate development projects, Hooman Nissani is a name that carries a lot of business acumen and credibility. As the co-founder of the Nissani Brothers Enterprises, he has been involved in the development of massive projects including Playa Vista Auto Mall, the largest single-building auto mall in the United States. With his expertise in the field, Hooman Nissani has valuable insight into how best to choose partners and vendors in various development projects.
Partners in Development Projects
A development partner is not someone to be chosen randomly. In most cases, that business partner will be directly responsible for the success or failure of the project. No matter how big or small that project, selecting a partner needs to be done meticulously and based on rigorous vetting.
Shared Common Values
Just as in personal relationships, business partners need to click. Without chemistry, they become an odd couple with conflicting visions and goals. “It makes all the difference,” says Hooman Nissani, “to seek a partner who has the common standards and shared values as you.” When both partners are united by the same passion and inspired by the same values, it becomes easier for them to work together and see the project to the end. On the other hand, selecting a partner who has a different agenda, or doesn’t believe in the project, can only create problems and limit the chances of the project’s success.
Financial Stability
Apart from differences in goals and not having the same values, most hurdles that come in the way of land development projects have to do with finances. To have a financially solvent partner is a key factor since fiscal strength is the balm to many development woes. Another key to success in this field is to agree beforehand on each partner’s contribution to the capital. A partner with a bad credit report or whose financial management abilities are not up to snuff will be a liability, rather than an asset, when the project faces the first snag.
Value Added Skills and Talents
Entrepreneur Hooman Nissani values skills and talents in a partner as much as he values their financial capabilities. “Before you settle on a partner,” Nissani states, “for your real estate development project, ask yourself what set of special skills does that partner bring to the table? Always look for the skill sets that complement yours and talents that shine in the areas where you fall short.” Since this is a partnership, the more diverse talents each partner has, the better. If one partner lacks financial skills, then the other should excel in business accounting and so on.
Likeability
Interpersonal assets are a desired aspect of a good partner. Partners need to like each other, have faith in the other’s ability to pull the project through, and trust each other’s decisions. That interpersonal charm will not only need to work on the partner but also on everyone who’s affiliated, even remotely, with the project.
Real Estate Vendors
While working with a partner who shares the same vision is important to the success of the partnership, it’s just as vital to select the right real estate vendors as well. Some factors to consider in vendors are:
Fair Pricing
Since the main goal of starting the project and seeing it through to the end is to make a profit, a vendor who doesn’t adhere to the principles of fair pricing can undermine the whole enterprise. “Make sure to agree with the vendor on a general pricing framework in advance,” says Hooman Nissani. “An experienced developer defines a fair margin of profit for all parties involved in the project.”
Specialized Skills and Track Record
Naturally what sets a real estate vendor apart from other businessmen is their ability to manage people and interact with various players in the market as they work on sourcing out the material. “When you set out to choose a vendor,” Hooman Nissani suggests, “do your homework and find out if their history of performance qualifies them to handle this type of project or not.” Much like the business partner, the vendor’s special skills are a decisive factor during the various stages of the project’s life.
