Pooling money together for investment

[Brett Ferrara]

Anyone have any experience going partners with friends to buy property in an LLC and care to share experiences and insight? Ive been thinking about this the past couple years. Perhaps gathering 5 people together each putting in 50-60k and buying a 200-250k property with cash, or better to get mortgage? I can imagine the headaches that could come involving other people but I would think the operating agreement would be of utmost importance before getting involved. Thoughts?

[Theresa Harris]

You need to have everything mapped out and drawn up by an attorney.  Ideally it would be whatever percentage you put in is the percentage you get out after expenses.  But how do you make decisions on what needs to be done, what happens if one of the people wants out?  

If you have $50-60K to invest, use that as a down payment on a home and get a mortgage for the rest.