Investing with other people

Some people who are involved in this blog assume that investing with other peoples money is a great idea. I have fought tooth and nail to prove that it isn't.
Mr. Rayban has gone ahead and invested in property with friends with the purpose of fixing and selling. That, I would like to state is not a bad idea. Everyone puts in money, everyone does the work, then everyone reaps the benefits. That is like buying shares in a short term job.
However, this individual is talking about a longterm contrarian investment in an apartment block with investors who are strangers. But problems arise when there are different opinions involved. For instance:

1. I've been researching this area for a year and a half, and payed to travel there and meet professionals in the industry, and see if it was a viable opportunity. My trip cost $4000. So can I include my research time, and the cost of the trip as part of my share?

2. People are fickle, and tend to change their minds often. An investor grows impatient after his 10k is tied up all year, and returns have been minimal. Even though he has signed his money over and can't have it back until property is sold or shares are bought out, he is angry at the investment manager, and keeps bringing up how he could make more in an rrsp.

3. Additional costs add up. Lawyer and accountant fees accumulate making the profit margin even smaller. In fact, each investor could actually end up paying extra each month with additional expense.

I realize (as disposable joe will point out in the comments) that it's a good starting point for someone who has no cash, but if their lacking funds, their share will be small, and they won't see much return anyways.

This is why the most important thing I suggest is to get your spending under control, and save a down payment of your own, or rob a bank, or marry rich and old.




Mr. Taylor #2 - Soars like a solo flying turkey