Hello BP,

I am currently looking at trying to buy a duplex to try out the renting game and see how it goes.  Currently in my area duplexes are way overpriced.  Instead I am look a few hours away from where I live at areas that are much more reasonable.  I happen to have a brother that lives in an area that I found a decently priced duplex.  Here is the plan that I was thinking, and I'm not sure if it would be considered illegal or get me in trouble in some way.  So after talking with my bank, an owner occupied duplex I can do as low as 5% down, however a non owner occupied is 20%.  After talking with my brother he would like to move out of his apartment into something a bit bigger and this duplex I found fits the bill.  As far as financing, my plan was to co-sign on a loan for an owner occupied duplex where my brother would be the "owner", this way we can do the 5% down.  I would take care of paying the mortgage and expenses.  

In reality, this partnership that we have would be me providing all the money and he provides a signature so we can get the 5% down. His name would be on the title and everything, but ideally after a year or so, he would get taken off the loan. Either transferring to an LLC or just removing him in some way to transfer everything over to my name.

Is there anything wrong with this plan?  The biggest reason for me to do it this way is it allows me to keep a much larger reserve of cash available if something happens.  If I pay the 20% down then its about $12k more than the 5%.