Hi! So, my husband and I are self-employed and bought a home to live in in September 2014 at almost the max we were allowed to purchase, according to what our tax returns say. We make more than what it says on paper and our 2015 tax return should be better, but I'm not sure if we'll be able to purchase a 2nd property on what the returns say we make each year. We currently have about $25,000 in savings, but that's not really enough for a down payment, especially if repairs are also needed.
My husband's brother, however, makes good money on paper and wouldn't have an issue getting qualified in buying a home (it would actually be his 4th home - he has been buying properties as primary residence and moving every few years, renting out 2 of his 3 properties now). He wants to partner with us - him being the financial partner and us being the managing/landlord partner, owning a rental unit together.
This sounds like a good idea except the worry of the potential for family problems that can happen when money comes in the picture which I would hope wouldn't be an issue. I also don't really know how to structure the agreement so we are both able to have our names on the home besides buying through an LLC which requires cash payment neither party has. If, say, he dies or we get in a bad argument, we want to be able to have some claim on the property. Are our names being on the title enough for something like that? Also, what about protection from being sued if we are not through an LLC?
We also would like to have the property on our record so we could the profit it as income, once we have a tenant there long enough. What is the best way to purchase a property together so we are both owners of the home? Would he be a primary and my husband be a co-signer? Would he be only the primary on the loan and we would have a separate contract on the side stating our ownership in the home? If he died, I don't know if that second scenario would hold up in us being able to legally keep the home.
I hope I am being clear in what I am asking. While we could eventually save up enough in a year or two to buy a home, my brother-in-law would be able to fast track us by being able to be our money now and get an investment property much sooner. Since this would be our 1st income property purchase, I just don't want to do it the wrong way, especially legally, just in case. It would also be nice having someone that is a little more familiar with being a landlord to help us with our 1st prop.
*For a little more backstory, we have 3 little children and don't want to buy homes like my brother-in-law and move every year or so to get the owner occupied loans. Also, our current home wouldn't rent to truly make a net profit on it.
I appreciate your time in reading and answering my questions.
