Best way for investors to buy rental property in Austin

[Diego Corzo]

Hey BP,

Two friends and myself want to buy a rental property (SFH) in Austin, Texas.

We want to get a conventional loan paying 20% down.

What will be the best way to go when we structure the purchase?

1. Joint Tenancy

2. Tenancy in Common

3. Establish an LLC and purchase the house in the name of the LLC.

4. Other

The three of us are salaried employees at a tech company and we want to purchase other houses in the future. Which option will work best so that we can get the best interest rate possible.

[Jerry W.]

@Diego Corzo my personal experience is that I pay 1% higher interest rate if it is a company. With 3 folks I would go with the LLC though. In LLCs usually all members are managing members. Get a really good operating agreement. Learn as much as you can about corporate formalities. Good luck.