Should I buy an investment property under LLC or under my name?

[Sean Beyrouthy]

Hello! Two friends and I are in the initial steps of purchasing an investment property most likely being a SFH but possibly a multifamily. We wanted some feedback regarding the way we should structure our partnership. My initial thoughts were to start the right way and form an LLC, and on the other hand we thought we can just have all three of our names on the deed and possibly transfer it over to an LLC at a later date when we have a bigger portfolio. I know an LLC can help with liability and taxes, but I also know we can just obtain an umbrella policy for liability purposes if we don't go the LLC route. Would love to hear some feedback.

[Mike Davis]

@Nathan Gesner is correct @Sean Beyrouthy, when doing this with friends, you want to spell everything out upfront on what expectations are for everyone. Best friendships have been ruined in business partnerships, mostly because everyone thought "We are all friends...we are good here, we need nothing in writing!"

When you start building your portfolio, hard money lenders and commercial lenders would rather or require you have the LLC.