Partnership without an LLC/Corp

[Robert Sapienza]

Question for (I'm sure many) people that have been in this situation. Here is the lay out. 3 people. All three of us are established in our own careers at age 30. All of us have been flipping houses together for the past 2 years and want to start to get into the buy and hold (rental business) together. We work very well together and everything has been going smoothly. Here is the debate. For STARTERS we don't know if we should open an LLC together and start to buy properties with private money via LLC OR if we should each get conventional loans independently (tenants in common) with an operating agreement in place. Example: Party 1 gets a mortgage solo with party 1,2 and 3 on Deed. Next house party 2 gets a mortgage solo with party 1,2 and 3 on Deed. Next house party 3 gets a mortgage solo with party 1,2 and 3 on Deed. This continues via conventional loans vs just starting with an LLC. The pull for conventional loans independently comes from us getting lower interest rates and 30 year amortizations (higher cash flows) but we dont know if it will get sticky during tax season being that we arnt all on the mortgage together. If anyone could shed some light on how they started their partnership (being an LLC or tenants in common) would be much appreciated. Just want to know if anyone out there has NOT done an LLC with 3 or more people to start buying rentals while scaling up (purchasing 2-3 properties a year) and how it has affected them.