Friends pooling money together to purchase property (Thoughts?)

[David I.]

Hello:

I have some friends that want to pool some money together to purchase a rental property.

I am leaning against it because a) they are friends from work, not business partners and I do not want to mix the 2. 

b), they only have $5k - $10k to invest each. 

There are other reasons, but you get the picture.

It does bring up some interesting questions that I am sure have been answered before, but I'll ask anyway.

1) If they only have $5 - 10K to invest, should they pool their money together or where should they put it??

2) What would be a realistic return on that for them? I'm sure it depends on the property, etc....

3) Does anyone have success stories and nightmares of pooling money together buying a property?

I want to be able to intelligently and nicely tell them NO.... :)

Thanks,

David