Purchasing Duplex - Multi-member LLC Mortgage

[Daniel Watts]

Hey BP,

I am part of a 3 member LLC that is currently under contract on a duplex we plan to buy and hold as a non owner occupied rental property. This is our first property and as we start looking at the financing options we have some questions...

Option 1) Take title as 3 individuals and they want 25% down on a 30yr fixed. - I understand that we have the option to move the title into the LLC. What does that process look like? Is the risk of being called due higher if we live in a very small rural area? And, is there a penalty for being called due other than just finding a new financing option?

2) If we purchase as an LLC the bank wants 35% down for 30yr, 5/1 ARM or 7/1 ARM and personal guarantees.

***Sidenote - 35% down will mean that two of the partners will have to put more cash down to cover the third. Any ideas for helping the 3rd partner get to equal ownership? 

Is one of these more favorable than another for new investors looking to make our first investment as straightforward and predictable as possible, while also trying to protect ourselves, our investment, and ourselves FROM our investment?

Any input is helpful!

Thanks