Brittany Barchalk
By Brittany Barchalk on December 01, 2022

How to Invest as a Group in Any Asset Class: 5 Key Steps

Have you and your friends been talking about getting into alternative asset investing together? Maybe you have been thinking about buying property with friends or investing in collectibles. If you and your friend want to pool resources, invest in high-value assets, and build wealth together, you may consider investing as a group. 

Mixing money and friends has been a societal no-no for many years. Those that can break through the stigma and invest together can learn faster and go further. This post will cover five key steps to invest as a group so you can learn and grow together. 

  1. Define your investment goals and contributions
  2. Research the different types of asset classes
  3. Find a tool to help you organize your investment group
  4. Formalize your group - become a business
  5. Take action and invest in a deal!

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Define your investment goals and contributions

What are your goals as a group? Are you looking to learn and grow together, get a good return on investment (ROI), buy a specific investment, or build wealth through ownership? Discussing what your collective group goals are will provide alignment before you get started or start researching asset classes. 

You’ll also want to discuss what the members of your group are comfortable with contributing. If you already have a deal in mind, you probably already know what each member needs to contribute. But if you don’t, discussing a monthly contribution is worth talking about. For example, if you have 5 members and you each contribute $250 each per month for a year, you’ll have $15,000 for a down payment or minimum for your first deal. 

Make sure you and your members are all aligned on your goals and contributions before getting started. It can relieve many headaches down the road.


Research the different types of asset classes

There are so many different investment opportunities and the asset class your group decides on should be in alignment with your investment goals. Here’s a breakdown of all the investment possibilities. 

  • Active Real Estate - vacation homes, short-term and long-term rentals 
  • Passive Real Estate - syndications 
  • Business - private equity, small business, franchise, startups
  • Collectibles - art, wine 
  • Recreational - RVs, vacations, experiences 
  • Digital - cryptocurrencies, NFTs
  • Conventional - public markets

With so many options, we hear often that it’s good to invest in something you and your members have familiarity with. And if you don’t have familiarity with any of these, a great way to learn is to join a community. The Flipstress is a great place to learn about house flipping, Left Field Investors helps with passive investing in syndications, and Thanks For Visiting is a community of hosting experts in short-term Airbnb rentals. Communities are great places to find potential members as well!


Find a tool to help organize your investment group

Once you’ve got your goals, contributions and have settled on an asset class, you’ll need a way to stay organized. Managing a group investment can be really hard if done on your own. From keeping track of everyone’s contributions to a formalized agreement, group dynamics are tough. 

Running an investment group is much like running a micro-business. You’ll need to stay organized from start to finish. Luckily, Tribevest was built to do this exact thing. Tribevest will form your multi-member LLC, open a business bank account, and help you ratify an operating agreement. This way there is always visibility across your group and everyone knows their role. 

Tribevest offers peace of mind with voting, funding rounds, document storage, cap table, etc. will keep you organized, keep members confident in their experience, and get your group ready for tax time.


Formalize your group - become a business

It’s important to take the steps to create a multi-member LLC. This will protect you and your members legally and you’ll get tax advantages being an LLC. Becoming an LLC will allow you to open a business bank account where all of your members can contribute their capital. Doing this allows transparency into the transactions so you know everyone is holding up their end of the deal. 

One of the most important things you can do to protect yourself and your members is to agree and sign an operating agreement. This operating agreement is foundational to any strong investment group. It should outline any questions that may come up from equity to dissolution. The operating agreement is the source of truth so there are not “she or he said this” moments that could ruin relationships.


Take action and invest in a deal!

Now that your group has set the foundations, it’s important to keep up the momentum and take action by investing in your first deal! Whatever your group has decided on, go on and do it! 

You can manage all of your communications around the deal like voting, motions, and investment documents in a tool like Tribevest. This way everyone is in the know and nothing will slip through the cracks. Your group will be able to focus on investing! 


Invest as a group and level-up

Group investing doesn’t have to be intimidating—when you’re doing it with the right team, it can be rewarding and fun. Teaming up with like-minded friends, setting up the right systems, and getting the whole tribe on the same page will set you up for success. Then, all that’s left to do is start building wealth together. 

Getting all the paperwork, documentation, and alignment settled for your group can feel overwhelming. If your head is spinning just thinking about it, you’re not alone. But don’t let your group stay stuck in the daydreaming phase—make your group investing dreams a reality with the help of Tribevest! Tribevest arms you with the tools and resources you need to team up with friends and family to build wealth together without risking your relationships.

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Published by Brittany Barchalk December 1, 2022
Brittany Barchalk