Preserving The Friendship

Jerry's friend pitched an idea to him. It makes Jerry consider a matter of money versus friendship.

QUESTION: Jerry wants to buy his first house, and wants to get a duplex and rent out the other side. A friend of his wants to be that renter, but he’s worried that it could jeopardize their friendship. Dave doesn’t think it’s outrageous to do this, but Jerry needs to be careful.

ANSWER: It can do that. Doing business with friends always puts that friendship at risk. I do business with friends, but the closer the friend, the more I have to lay it on the table by saying we have to do this right, because we are putting our friendship on the line. You have to say if there is any chance you can’t pay, we need to work this out because I can’t afford charity. You need to be extra clear up front about your expectations, but don’t do completely away with it.