Financing a Multifamily in a Partnership

[Timothy Lanza]

Hello,

My investment partner and I have just had an offer accepted on a 3 family building in Fitchburg, MA. This is the first property we are buying as partners but our intention is to continue to scale with more and larger deals. Our general strategy is buy and hold for cash flow and appreciation.

We are looking at financing options and at first we were led to believe we needed to hold the property in an LLC and therefore get a commercial loan. After shopping around for different products and rates it is clear that a residential loan would have much better terms for us.

We are each putting in 50% of the down payment, our credit scores are both 780+ and one of us is a high income earner while the other is much lower and self employed.

We are searching for some advice on a few different questions...

1. Can we get even a residential Mortgage in this situation?

2. What is the best move for our partnership in this deal and moving forward? Create an LLC or just a partnership agreement?

3. Does it make sense for 1 or both of us to be on the loan, the deed or both?