Can a person teach a language without yet dominate it?

Initial clarification: I am talking about a very informal teaching style. Teaching in a formal environment without qualification would be irresponsible.

A bit of context. I offered free German lessons to two close friends of mine because of two reasons: to practice my teaching skills and to deepen my knowledge of the language. It is said, that when you can teach a subject, you have to previously understand it well enough. And when that is not completely the case, teaching is very helpful in solidifying knowledge. As an intermediate German learner, I find experimenting with this idea quite attractive. 

I just wanted to know your opinions. Will teaching with my current knowledge be effective? How much does one need to know about something to start teaching it at the basic level? I have this theory, that for example, to teach how to add, you don't need to know calculus: you just need to know how to add.

Let me know how you think it will turn out!

Personally, I'd rather learn the items you mentioned on my own, but what you describe is pretty common in language exchange so there is a precedence. 

In my opinion teaching definitely helps to cement your knowledge of the language and organize it better in your head. Being in front of a student you are faced with a ton of questions, which force you to rationalize the intricacies of the language, whether through the lens of traditional grammar or through your own study methods, summarize that knowledge, categorize it and teach it in such a way that a beginner can make use of it. In that sense, teaching will almost certainly be beneficial to you. I’ve done it with English in the past and I can attest to it.

Now, the question is whether it is beneficial to the student or not. And that can get particularly dubious if you decide to charge them for that service. Personally I wouldn’t ever charge anyone before I reach at least a solid B2 level in all 4 skills (reading, writing, hearing and speaking), and even then I would adjust my fees accordingly. If that weren’t the case I would do it free of charge.

Having said that, I believe we live in a free market, so people should be able to make their own minds and choose to validate a service with their money if they see it fit. What’s key here is transparency, so both parties have to be aware of what they are getting. In that sense, you should make it perfectly clear that you are an advanced student who has not yet mastered the language but can offer some valuable insight.