AirBnB With Co-Ownership and Depreciation

[James M.]

Ok, I have a weird situation here and at the get go maybe it sounds like a bad idea.

99 percent of the time I wouldn't mix investments with family/friends but I have this situation I'm trying to deduce if it makes both financial and social sense.

My mother is looking to buy a home downtown San Antonio, one where there is a clear cutoff for an apartment specifically to AirBnB the other half of it. She wants me to go half in with her. Who splits what on the mortgage and who will deal with the capex/repair/vacancy and so on is still very much in the early phases and will need to be very strictly stipulated in the coming days.

My mothers end goal is to get an investment property with lower buy in (we'd go 50/50 on down payment with a loan), live on one side and she'd AirBnB and turn over the other side. She currently has AirBnB experience and does something similar today with the place she currently lives, so she is not afraid of it.

My end goal is to continue to invest and gain property and San Antonio is very, very hard to find worthwhile properties even getting close to 10 percent CoC.

Both of us are high earners (100k+ a year) with Excellent credit. In a worse case scenario I would be able to take over the mortgage with zero problems (well, except investment wise).

I really have two questions that perplex me at the moment on the off chance I even remotely consider this:

1) She does not currently own a home and so this could potentially be an FHA loan. Would I be able to be co-borrower even if I personally have an FHA already on my owner occupied house I currently live in? Or would it have to be conventional since we'd both be on the loan?

2) How the heck does depreciation taxes work here? My general reading is it'd be your normal depreciation, divided by the area where the AirBnB patrons would live. But then, does that then get divided again between the two of us? Trying to make this very tax legal as possible.

3) Do I need an LLC for this to be fully legal/make sense? (Ok, I had three questions :))