Working with friends

I have a couple of friends right now who are talking with me about doing different projects with them on the side. Working with friends is always tricky, because the dynamics of the friendship sometimes don't translate well to a business project. For instance, one friend wants to buy some rental property, but he has a lot more capital available than I do. Consequently, we have different expectations about cash flow, management, how much we would spend on a property, etc.

I have another friend who wants me to do some legal document work for his business, but it's been tricky figuring out how and how much I will be paid. In the meantime, I've been doing a little work without an agreement, which is dangerous. Last time that happened, both this friend and I were the ones left holding the bag when we did a lot of work for someone we trusted and both got stiffed. That person has now been charged with a string of felonies out of a similar, but unrelated, incident. Just because someone is a friend doesn't mean you can jump in willy-nilly. You may lose both your friend and your money, like I nearly did. As it was, oddly enough, I ended up with a television worth about 5% of my work efforts.