HOW to finance Dad's old house into my first rental?

[Steve Robinson]

Summary:

My dad wants to sell his house and move into an apartment. My brother and I will purchase the home and turn into a rental property (it will be our first of hopefully many rentals). Just for round numbers, let say this small 2 bed room home is appraised at 50k and he is willing to sell it to us for 40k and my brother and I agree to split it 50/50 at 20k each.      My brother and I both own our own primary residences. 

Best options to come up with the 40k funding?:

HELOC the funds from the equity out of our own homes?

My brother has the 20k cash on-hand for his half, I however, do not. ---- But I think the better idea is to finance the whole thing...?

Should be dad "gift" us the entire house and we save on the taxes and come up with the funds through a private lender?

Should we put our names on his current mortgage and eventually refi him off?

My end goal is to have an LLC setup with this home under it & getting there the cheapest way possible.

My main questions come down to what everyone cares about, how to find the cheapest money and legally avoid the most taxes...

Thanks for reading - SJR