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What do you think?
Google didn't like it. Google completely dropped his site from the SERPS and dropped my real estate index Page Rank from 5 to 0.
I removed the links to his site. One month later, Google reinstated my Page Rank. Three months later, Google added my friend's site back to the SERPS.
I believe that having many links from one site to another can have a negative effect for both parties.