Localized REIT...Good Idea?

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I currently have 1 Property that I own with another buddy of mine that we bought together in college but we are wanting to start expanding our little empire. We've come up with the idea of something of a "localized REIT." We are wanting to find 4 - 6 buddies that all want to throw in $25,000 or so and raise $100,000 - $150,000 to go out and put 20% down on $500,000 - $750,000 worth of properties (after creating an LLC). My question is has anyone done this in there area? Do you consider this a good idea? What should we do? What shouldn't we do?

All insights welcomed and appreciated.