Family Investing with me?

[Daniel Toshner]

Hey BP,

Wanted to reach out and see how some of you have done this... I have started investing and currently have properties.  My family is asking to get involved as well and want me to do the investing for them with their money. 

 What is the best way to get this setup legally?  

Any other tips would be greatly appreciated!

[Chris Mills]

I take a different position when investing with friends and family.  In those instances, it is all the more important to have EVERYTHING in writing.  Contracts, procedures, and all expectations should be written out and clearly understood by all parties.  That way if someone looses more money than they expected, or in any way feels slighted, being able to point back to what you previously agreed upon helps to prevent the bulk of the "he said, she said" and hard feelings that can ruin valuable relationships.  

Additionally, I would advise that you strongly consider the personality types that you are investing with.  Some partners are just not worth the money.  Some investors will harass you every other day just to check on their investment.  Some will feel slighted no matter what the outcome of the project is.  There are investors that I have chosen not to work with for these reasons.  Not because I didn't need the money, but because I valued the relationship more.