Their my friends. = incorrect
There my friends = incorrect in this usage
(Using "There, there, my friend." as an expression meant to calm someone is entirely different, and acceptable.)
That's their house. = correct
That's they're house. = incorrect
That's there house = incorrect
The house is over there. = correct
The house is over they're. = incorrect
IT / IT'S / ITS
It = pronoun
The teacher told the class it had to stay late.
It's = contraction of "it is"
It's time to go home.
Its = possessive pronoun for "it"
You can't judge a book by its cover.
It's one o'clock = correct
Its one o'clock = incorrect
Its colour is blue = correct
It's colour is blue = incorrect
Make sense? Okay. Now go to your book and do a Search/Replace. Yes, it'll take time. But the incorrect usage of those words is a definite flag for editors/agents.