It would be fun to invest in a local real estate project with a group of 5 or 8 friends. Together, we could probably wrangle up $50,000. This opens the door to real estate opportunities we could never afford on our own. Plus, it would be fun. I'm picturing us pouring over details on how to transform an aging, tiny frame shop into the kind of wine bar we miss from Brooklyn.
One of the most common reactions I've heard to this idea is "that sounds like a great way to ruin friendships." I hear what they mean. There's a lot of stress in real estate projects, and when money gets involved it's possible to amplify stress to the point where you act belligerently.
Does it have to be that way? Surely it's possible to write an operating agreement that accounts for things like unforeseen expenses or someone wanting to cash out early. It's definitely possible to run a venture poorly and damage relationships in the process, but it's also possible to do this well and keep friendships intact no matter what the project's outcome is.
Let's say we do create an operating agreement that makes everyone feel comfortable and we get a loan that transforms our $50,000 into $250,000 of purchasing power... how do you find a good opportunity?
Here is where we come to the heart of this idea: I feel like most people think they have a cutting-edge in finding real estate opportunities. Because who the hell knows whether a stock is going up or down, or whether a particular web3 project will get meme status and take off, but I know it in my gut that this aging, tiny frame shop could be a popular wine bar.