Buying a rental with brother, question about ownership

[Ray Leong]

I am planning to purchase a rental property with my brother. We are a bit new but have done our research with regards to the property. We are fuzzy on the legal side and will probably consult with a lawyer but thought I would make a post here as well.

The down payment will come from his bank account and the mortgage and title will be under his name. We have agreed that we will split ownership and plan to form a LLC. I guess my first question is, can we simply declare in the LLC that I am 50% owner and I will be allowed to reap 50% of the tax benefits etc come tax time despite the mortgage/title not being under my name? Secondly, ignoring the other benefits of a LLC, is the LLC structure the best way or even necessary to achieve this? Thank you for all your help!

[David Lilley]

Look into holding the property as tenants in common. You and your brother will both create an LLC for yourself. Then, you will purchase the property as tenants in common (your LLC and your brothers LLC will share ownership). This way if you want to do a 1031 exchange in the future you can take your individual profit and buy whatever you want and your brother can do the same.