What is the best way to invest with friends without an LLC?

[David Grant]

Hello everyone,

We are three friends looking to invest in real estate. Our first intuition was to get an LLC but we no longer thinks it makes sense for the following reasons:

- Have to get commercial loans instead of residential, which have much higher interest rates

- Have to get homeowners' and umbrella insurance anyway - we feel the risk of being sued while owning rental properties is lower than running other types of businesses if we don't cut corners on the rehab and have a good property manager 

- Large amount of filing and annual fees required

Are we thinking about this correctly and is there another structure that would best suit us? I have spent hours reading the posts and it seems like people either just do it in their own name, or suck up the fees associated with an LLC and take on a commercial loan.

I also read you can quit claim on a deed but after reading a couple topics, it seems like there is still a 50% chance the lender will consider it as a full transfer and exercise the acceleration clause.