Should I LLC my first home?

[Robert Blunt]

My wife and I were married last October.  Our long term life goals include building a portfolio of investment properties as a means of growing wealth.

My father is a hard working frugal man who inherited a few million dollars in 2004 and has done a good job of protecting it.  He has most of it tied up in commercial real estate and is now retired and would like to start building a property portfolio as well.  Typically he tends not to step out of his convert zone as he has a low tolerance for risk, however he assures me he now has much more then he needs to live a wonderful life and can afford to use some of it on speculative investments.  He wants to give me capital and take the lead in regards to leg work and research.

My short term plan to take a first step towards our ultimate goal includes thinking of my first home as an investment.  My wife and I plan to search for our first home, by sorting our criteria as we would if it where only an investment and not somewhere we intended to live.  We plan on living in this house for 3 years and then buy another home since about that time she will be done paying for student loads.

Question:

If my father and I both put up the down payment, my wife and I pay rent equivalent to other similar homes in the neighborhood and then move out after three years (keeping the home as a rental in a joint portfolio with my father). Should I develop an LLC with dad to umbrella over the house?  My fathers name will also be on the mortgage as he will be half owner.  I expect that will prevent my wife and I from taking advantage of any first time home owner tax benefits.  

We live and plan to buy in the Alexandria, Virginia area.

Any suggestions on how we can best go about getting started here?

I'd really appreciate any advice.

Thanks,

Robert