How to off with this Joint Venture?

[Antonio Chelala]

Hello all,

I hope you are doing well and you are having a good weekend!

I met a few friends at a Real Estate event and we have been talking about the process of getting a deal in a join venture, but we are confused on how a few things work:

Should we do an LLC for the joint Venture? Under whose name does the property go under if buying with an LLC?

Should we get a mortgage on our names in order to avoid having to take a commercial loan (Min 25% down), and how does the mortgage work with a Joint Venture ? 

Can you refinance if you have an LLC for the property, or is it better to move the property to an LLC after refinancing to avoid the due on sale clause?

Would the deed have the LLC or the LLC holders?

Thanks a lot :)

Best,

Antonio

[Alesandro Breguez]

@Antonio Chelala, @Eliott Elias, im not an attorney but based on my limited experience here a few insights and thoughts:

1. JV formation: you dont need necessarily a LLC, you can form a JV partnership for each specific deal. The downside risks of the shared LLC is that you will be exposed to the liabilities of your partner, so it's important to know well the other party.

2. Financing: this connects to (1) above, is the shared LLC is taking the loan, both will be grantors and liable for the default. This might put you in a risky situation. Some JV regulates that the funding partner hold the mortgage and title.