Bringing in Partners/Investors into my existing rental properties

[Shakir Ahmed]

Hello,

I own 2 multi family rental properties, one of them since 2012 and the other since 2015, both are mortgaged. I am considering bringing in an investor to basically swap out my mortgage company in exchange for sharing the proceeds of the rent with them. My plan is to:

1) Pay off my mortgages using the cash from the investor

2) Record the house deed under an LLC (currently it is under my name)

3) Bring the investor as a partner into the LLC with 50% share

I am aware of the following challenges:

1) The insurance policy on my rental homes is extending liability from my primary home - I am getting an umbrella policy. However, the insurance company will drop my once they know the deed is under an LLC and require me to get commercial insurance

2) What are my tax liabilities? The amount the investor is giving me will cover my mortgage, i may make a small amount on top. End result will be me and him owning the property 50-50 through an LLC

3) If i just added the investor to the deed instead of using an LLC, will this trigger any tax implications? Would this be considered "half a sale" of my property? If so what is the legal way to do this?

Any other mechanisms for accomplishing the above stated goal ? 

Thanks