Splitting Liability- LLC/Commercial Loan Required?

[Dakoda Spencer]

Hey BP!

My partner and I are looking to buy our first rental property within the next 6 months and are looking for some clarification. We are ready to take some action!

We are looking to get started with a 2-4 unit multi-family and are wondering the best way to do it. We agreed upon a 2-4 unit property since I have learned they are typically easier to finance, since they aren't considered commercial.

We both agree that we would like to split the liability equally so that we both have the same amount of skin in the game. We were thinking about simply forming an LLC and using that to buy the property. After doing some more research, I'm finding out more of the pros and cons of using an LLC within REI, and now I'm wondering if there are any other options.

We like that an LLC would cover us in case something would happen. I have a house that has some equity, that's my main concern. But, I don't like that we would have to use a commercial loan to buy our MF, even if it's a 4 plex or less. I'm just not too familiar to the terms of commercial RE.

Does anyone have any suggestions as to the best way that we could buy a property using traditional financing but still be equally liable? Of course, we would like to be as covered as we can as well.

I have seen where people buy a property using their personal info and then move it to an LLC, but we don't want to risk the due on sale clause getting triggered on us.

Finances: Together we will have enough money for the down payment and rehab work to get the property rent-able for our market. I have a credit score in the 700-725 range. He isn't sure on his at the moment.

Area: We are looking in the Cumberland / Frostburg Maryland area. We would rather stay closer to Frostburg, since there seem to be a higher quality tenant pool there. We have also tossed around the notion of going farther away to places like Martinsburg Wv, but are wanting to stay close if we can.

Looking forward to start meeting people at the RE meetups!
-Dakoda