Monday 12 - Investing with Friends Question: All of my friends tell me its a bad idea to buy an investment house with a friend. Is this true? Answer: Yes and no. Yes, you can reasonably buy investment property with a friend, relative, co-worker or anyone you choose. No, it's not a good idea if done incorrectly. The problem is not in the joint buying, it's usually in the lack of a written agreement between the investors. Without a proper agreement put together by an experienced attorney in advance of any purchases, it's inevitable that what started as a good relationship will run into problems when one investor wants to sell and the other doesn't, finances change or the property has losses. So, if you want to buy with someone, that's fine -- just have a proper agreement in place before the first check is written.

Published: May 12, 2008

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