Is this legal and can it work?:

Get 100 people to chip in $1000 or 50 to chip in $2000...

With the money buy a rental property and name each of the 50-100 people as the employees who would all split the profits.

Will this work to make us a company of 50-100 employees so that we can get good Health Insurance?

Thanks!

I think it would work, but I don't think its necessary. I would talk to insurance agents. I believe there are a number of ways you can set up a group to negotiate a better group rate for health insurance. You can also look to small business trade associations, many offer health insurance.

Yes it should work, wish you would do it hear, I would love to sell 100 policies in one visit, I could take the rest of the year off

I am investigating it - hoping that the regulatory/financial issues of being an employer would not negate the benefit of getting the good insurance :)

No, it will not work in most states. For group plans most carriers will ask for documentation proving it is a legitimate business. Tax filings payroll records etc. Several even have a line in the contract the client signs that states they are not a business just apply for group insurance.
Each state is different though.