Traditional mortgage or commercial?

[Alyssa Teddy]

Hi everyone! 

My two friends and I (three of us total) are trying to buy our first rental property. We will most likely buy a small multifamily property (under 4 units). We are unsure if we should open an LLC and get a commercial loan (25% down, higher interest rates), or if we should get a traditional mortgage (20% down, slightly lower interest rates). Furthermore, I have never purchased a home and do not want to lose my ability to do a first-time home buyer program. So here are our questions:

1. Would I lose the first-time home buyer advantages if I do a traditional mortgage for an investment property? We would not owner-occupy so I'm not really sure. T

2. Given that we want to grow our portfolio over time, how should we structure this? I.e. buy with the lower down payment/traditional mortgage or go the commercial loan route instead? 

3. Any other advice for helping us structure this new business would be very welcome! Does anyone have any articles of organization for real estate LLCs that we could use? Or anything else that might help us? 

Thanks so much!!

-Alyssa