How to structure a partnership after a deal is closed under one person?

[Alex Ballesteros]

So I initially purchased my first investment property by myself (under my name / no co-owner/ borrower) back in November 2022 with an FHA Loan and very recently (within this last month) my brother & I have decided to partner up on this deal and on future deals moving forward, and we want to go 50/50 on this deal. FYI the title deed, loan & everything else is under my name currently, so im looking for some direction on how to best structure our partnership. Should we start up an LLC (thru an accountant or attorney) and transfer the property into the LLC? Or how would be the best way to achieve our goal to go 50/ 50 on this deal and future deals?

Is it better to use an attorney than an accountant (or vise versa)? 

Any information or personal experiences will help! Thanks in advance.

[Jason Marino]

Hi Alex,

There are different ways of structuring a partnership. Creating an LLC, as you suggested, is a good option for this situation. Before starting, you should confirm with your lender that transferring the property to an LLC would not create a due on sale clause violation. After you confirm this, you can create an LLC and transfer the property into the LLC. The LLC should include language related to you and your Brother's partnership. It should specify ownership, control, and how internal disputes will be handled. This can be done by yourself if you are willing to do the research and complete the processes that are necessary. However, it may be easier to work with an attorney if you do not want to spend a significant amount of time on learning the process.