Quick question on an early partnership situation. I am looking to make a move with my partner on a 4plex and 2plex in the next few weeks. Based on this being the start of the "business" and we are still working out the LLC arrangement etc, I will likely purchase in my name and then move these into the partnership. Curious how others approached purchases in a partnership early on when LLC / business cant make the purchase and individuals are on the loan docs etc.
Do i purchase on my name but add partner to title docs?
Do i keep loan and title under my name but then roll into the LLC? (so partners name not associated with loan/title but LLC ultimately has property)
Is there anything i should be watching out for to make sure I am not solely liable for anything with the property moving forward and legal issues would fall on the LLC?
Thanks in advance and if i need to elaborate a bit more feel free to let me know. Trying to juggle a ton of items at once heading into my first partnership and first purchase :)
My experience with a multi-unit purchase was that the lender wanted to see the purchase made by the LLC. However, as the LLC did not have a history (as many LLCs are structured for that specific deal) the loan was still personally guaranteed.
I highly suggest employing a business and/or real estate lawyer that you get along with to help navigate the process. While the business plan and deal structure are on you as the investor, a lawyer can help greatly with the execution. Mine was worth every bit of his fees -- not just in closing the deal but also in networking for future opportunities.