Came across this interesting article over on MSN's Money site on a topic I'd been meaning to discuss: the boom in real estate investment clubs -- which have roughly quadrupled in number, to 178 in past three years. Granted, as author points out, that's nothing like the boom we saw in investment clubs in the late 1990s (which soared to more than 36,000). Just as individual investors had the NAIC to help them form an investment club, there's the National Real Estate Investors Association, which will help you set up a real estate investment club of your own. Even in my own neighborhood, I have friends that have been trying to twist my arm to join them and other friends to go in together and buy rental properties.

Forgive me for once again being bearish, but I'd be wary of starting a real estate club at this late date, particularly if you don't have the deep pockets to ride out a downturn. Reason: The growing gap between housing prices and rental values in many booming markets. Given the explosion in prices, I think you'd be hard pressed in some markets to generate enough rental income to cover your mortgage payment. And if prices fall, you have no easy exit strategy -- you're stuck, underwater, for years to come. But that's the bearish view. Are there readers who have formed investment clubs in recent years that are working out?

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