Introduction to Partnerships for Bigger Note Deals

Last Updated on March 31, 2026 by T.J. Fitzgerald

Introduction

Partnerships in note investing can open doors to bigger deals, but they come with risks. With nearly 30 years in notes since 1996, I’ve seen partnerships make or break investors. This post in our series shares practical steps for teaming up effectively, whether you’re new to note investing for beginners 2025 or a seasoned pro. No hype—just real-world insights. Results may vary, so always do your due diligence.

Why Partner for Note Deals?

Bigger note deals often require capital you don’t have solo. A $100,000 non-performing note portfolio might be out of reach alone, but with a partner, it’s doable. Partnerships pool funds, share risks, and let you bid on larger assets, like distressed mortgage bundles. In 2002, I partnered to buy a $150,000 note package—something I couldn’t have touched alone. But partners also mean shared control. Pick the wrong one, and you’re in for trouble.

Types of Partnerships

There are three common setups. Equity partnerships split ownership and profits based on contributions. Debt partnerships involve one partner lending capital for a fixed return while the other manages the deal. Joint ventures, often with banks, pair your expertise with their funds. Each has pros and cons. In 2001, I used a debt partnership to buy a note, paying my partner 8% while I kept the upside. Choose what fits your goals and skills.

Vetting Your Partner

A bad partner can sink you. In 1998, I teamed up with someone who skipped due diligence. We lost $10,000 on a note tied to an uninsurable property. Vet partners like notes: check their deal history, financial stability, and goals. Get references. Ensure you align on strategy—flipping notes versus holding long-term. Always use a written agreement. Verbal deals are a recipe for regret.

Structuring for Success

Clear agreements prevent chaos. Define contributions, roles, and profit splits upfront. In 2008, I saw a partnership fail over unclear foreclosure cost responsibilities. Assign tasks based on strengths—sourcing, analytics, or borrower negotiations. Include exit plans, like buyout clauses, to avoid legal battles. Results may vary, so consult a lawyer for airtight contracts.

Scale Smartly

Partnerships can scale your portfolio from thousands to millions. In 2015, I joined three investors to buy a $2 million note pool, leveraging our combined skills for a 20% return. Transparency and regular communication were key. Share data, meet often, and plan for setbacks. Scaling means bigger rewards—but bigger risks too.

Next Steps

Partnerships can transform your note investing, but they require planning. My mini-course offers templates and strategies from my 30 years in notes. Sign up to learn how to structure deals and avoid pitfalls.