What are your thoughts on making your friend/relative your business partner?

I think it depends. If the two parties can leave emotions out of decision making, it could work. Comes down to trust and open communication.

Murky waters imho. Best to really set boundaries before turning friends into business partners and establish expectations beforehand.

That's tricky. On the one hand your friend/relative is a person I assume you have great trust in and who might share your values/visions. However, you have to be aware that your relationship might be tainted if you don't set your boundaries from the get-go.