PARTNERSHIP CONCERNS

[Eden Safdie]

Hey All,

Ive got this deal i'm looking to structure with a partner. Its our first investment, and were going 50/50. Were going into a "C" class neighborhood and the numbers are as follows:

Purchase Price: 39K

Rent: 850 / Mo

Taxes: 1300 / yr

Wed like to finance it and ideally set up an LLC to funnel our money through. The game plan is to purchase more together, and grow the company while reaping the benefits of the LLCs protection.

If we do this, are we by default looking at commercial loans? Because its now the company purchasing the property.

Will banks lend commercially on a property of that value?

Do the banks run both of our credit scores & look at both of our incomes? 1 of us is self employed with no tax returns, and the other is a W2 employee with 2 years tax returns.

The second shouldn't have a problem getting the mortgage. But will our ability to qualify dwindle because of the first partners status?

Our second option is to set up a regular partnership in which the W2 employee gets the mortgage under his name. Weve heard that one can transfer the deed along into the LLC once we buy the property. Spoke to a mortgage consultant who said its 'routinely done'.

Will the banks pull the mortgage back right away? Is this something any of you have experience with?

We are very eager to move forward but are just looking to clarify these few points & move through these setbacks. ANY insight at all on these issues will be greatly appreciated!