First Time Investor Question
So my wife & I have been looking to invest in real estate in St. Louis, MO for the past 6 months or so, and really would like to start with multifamily. We already own a home that we'd like to stay in. One of my single friends is looking to buy his first property to live in, and so my thought was that we could go in together on a nice 2-4 unit building, and that we could split the property. He would then live in one of the units, and we could rent out the others. My wife & I currently have a conventional loan on our home, and we're at 20% equity.
My questions are:
1) What are the down sides to him living in and us living out? Anything specific to worry about?
2) My thought was to start an LLC with myself and my buddy as co-owners with a 50/50 split. Would this be possible to do and still be able to get an FHA loan for 3.5% down?
3)Has anyone structured something like this before that could give me an idea of the best way to do it?
Any help would be appreciated!