Business Structure

[Lee Liberman]

Myself along with my two brothers have begun to acquire properties. I have purchased one house by myself, and my brothers have purchased one together. We have not created an LLC and are planning to purchase a property which we will split three ways. When we buy a house that all three of us invest in equally, how many names should be on the title and mortgage? We would like to use the Fannie/Freddie (4 loans a person) approach for now. My brothers are both on the mortgage and title for their house. Are they able to get 7 or only 6 more Fannie/Freddie loans (6 due to each being on the one reducing their access each to 3 additional)? Since they are both on the mortgage, does their ability to get mortgages get reduced because they are both shown as having the full liabitility as opposed to split?

Additionally, when we set up an LLC, would we be able to add the LLC's name to the title on our existing homes? Can we add the LLC to the new homes purchased along with one of our personal names and still aquire fannie/freddie loans or does this force us into commercial/portfolio lending?

Thanks in advance for your help.

-Lee

[Ellis San Jose]

If I am not mistaken, if your name is on a loan as a borrower,whether individually or jointly that counts as a loan against each party.

You might consider one borrower per property and then transfer into the entity of choice.