Investing with family

[Madison Heney]

Hello, I am looking at purchasing my first investment property out of state. I have been researching for the last few months and found an area I would love to invest in. I plan on starting with one property, with the potential of buying many. I have the money for the down payment/CapEx, repairs, etc. and have been researching independently. I have a realtor and loan consultant who I used for my primary residence who I plan to use again, and have found a property management company in the area I plan on purchasing.

Here is where my question comes in. My mom(57) would like to go in on the property with me. She has the money to split the initial investment with me and is open to the idea of buying more down the road. My mom does not enjoy researching and making decisions like I do, so that would all be me. She trusts my decisions and would be splitting payments and profits with me. I thought about forming an LLC for us should we go in this together. We are very close and get along well. What are your thoughts on investing with family? Would you form an LLC if you were in this position?

[Grant Thompson]

Madison,

A couple recommendations,

1. If you are investing with family be very clear and upfront on what the plan is, your expectations for the investment, and each person's role. Lots of people invest with family, myself included, but transparency is key.

2. You could either open an LLC and structure it as a partnership or structure it as a Joint Venture which is less costly. It is probably worth consulting an attorney as well.