Texas Contract for Deed

[Mike Clark]

Father and two brothers form a Family LP. The LP buys a few investment properties. The brothers wish to use two of them as their personal residences. If leased from the LP, the entire rent amount would be taxable income for the LP. If mortgaged, only interest. So, the two brothers will buy on a contract for deed from the LP.

Do the properties need a general warranty deed completed and recorded, and also a contract for deed to document the debt for tax reasons? Also, can the mortgage be set up as a unloaded loan, so that interest/principle is the same every payment instead of being front loaded?

TIA.