The fact that we continue to own a lot down the street from them makes it easy to default back to our original plan of building our own house if we find that living together strains our friendship.
And then you'll be dealing with the stresses of building a house while living with strained friendships in a house that isn't yours? Living in a tent in the future back yard of the house that's being built?
Kidding aside, I actually think could work. I would favor paying rent. I guess you would be financing in 4 people's names?
Things to consider:
Who makes appliance upgrade/replacement decisions
Who fixes, repairs, remodels the house
What if you want to pay off the mortgage but friends don't
Does rent rise with inflation, or is it more like a mortgage cost sharing+ % of taxes deal
Do you share the house appreciation?
Are there any inheritance issues to think about?
It's a little hard to be mustachian in many ways without your own place (control over thermostat, insulation levels, lawn care, cleaning services). You're combining your lives together in a lot of ways, so if you're not financially compatible, it could lead you to spend more.