Attorney · Spanish Fork, UT · Member since 2025 · 77 posts · 98 votes
1y
First, while an LLC isn't strictly required, using an LLC offers substantial enough benefits that it would be very highly recommended. Not only will an LLC provide legal separation between you and the investment sufficient to help mitigate your liability exposure, but it also give you the opportunity to lay the ground rules for partnership in the LLC's operating agreement. This can help you pre-determine how to handle operations, decisions, disagreements, and dissolution of the partnership. When money is involved, partnerships can go south quickly so having the rules of engagement laid out in advance can go a long ways to both mitigate and resolve conflict within the partnership. You should think seriously about having a competent attorney assist with drafting your LLC Operating Agreement rather than using some form template.
As for lending, as long as the the property is just a single-family or even a small multi-family (e.g. duplex), then residential lending is often ideal as you can often get better rates and may have greater flexibility to transfer the property to your LLC. However, commercial lenders can absolutely be viable depending upon the terms and rates you can get from a commercial lender.
As for insurance, you will want to work with an insurance broker to see what's needed, but a good "landlords" insurance policy is often a great place to start. I will let the insurance people in the BP community comment further on recommendations here.
Note: This information is for
educational and informational purposes only and does not constitute legal,
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