Partnering with family member, don't want her on the loan

[Bassma Mancilla]

Hi everyone, 

So, while shopping for financing, I've been told that for investment properties, I cannot use "gift" money. Really it isn't gift money, as it's going to be a partnership between a family member and I. They give me part of the downpayment, and I split any cash flow with them while I handle everything. I want to be the only one on the loan, as I want to protect her from any financial fallout in the even anything happens. 

Can I wait to close, and then have her send me the money? Or is this a problem if it's after the fact? The lender said my only option would be to allow the money to season for a couple of months and then proceed. What would you do?

Disclaimer: this is my first time shopping for an investment property so it's all new to me.

[Tyler Fontaine]

Can you buy the property under an LLC that you are both members of? If so you can have the operating agreement for that LLC drafted stating that she provides X amount of capital and receives Y amount of profit from the deal. While at the same time she is liable for zero negative repercussions or losses that may come up. This is not bullet proof but it is a starting point to do so.

Other than that the most likely option as your lender pointed out is to season the cash in your own accounts. Even still they may require some of her bank statements and what not.