LLC options for new STR

[Barak Schafer]

Hi,  

I am looking into starting an LLC and buy a property with my sister-in-law. We are looking to sell one of my current investment properties and use that plus some of her capital to buy a house, furnish it, and list on AirBNB. She has some money saved she wants to invest and my property would cover the rest. We are thinking about a couple options (I don't know if either are legal or possible but am not sure where to start looking)

1. We start an LLC and use combined funds for everything. But I am not sure how the financing works for an LLC especially with a short term rental and no credit history? It seems pretty impossible under those terms. Even the private lenders on this site all seem to have stipulations on a part of that.

2. I buy the property (my sale would cover down payment) and she pays to furnish it. Here's where it gets wierd. I would like to start an LLC and just rent out the house I own through the LLC (percentage ownership would be decided by capital put in). Or could I buy it and transfer into an LLC that is owned by both of us?

We both want an LLC for protection from the outside and to protect the family relationship. I own 2 long term rentals and my primary home. I have never touched LLCs or Short term rentals so any advice on any portion would be greatly appreciated. Thanks everyone.

[Chris Davidson]

@Barak Schafer there is a million ways to do this, and unless you sit down with her, and some advisors on legal and tax that know your situation you will get a million correct ways to do it that may or may not be correct for you. The LLC will only provide protection if it is ran like a business. Thus do it right have agreements in place before the start.

Best of luck!