what is the best way to form an investment group with friends

[Vincent Bess]

I had a question regarding multiple investor.me and three other friends are looking to purchase and rent out a few investment properties in the coming months. I would everyone to give me there opinion on these question below.

Legal wise what would be the best way to make sure everyone is help accountable for the investment properties? 

Can there be multi people listed on one mortgage ? 

Should we start off by creating an LLC or should we just purchase each property under our personal credit ?

As far as filing taxes at the end of the year how would this affect us?

[Michael Ealy]

Originally posted by @Vincent Bess:

I had a question regarding multiple investor.me and three other friends are looking to purchase and rent out a few investment properties in the coming months. I would everyone to give me there opinion on these question below.

Legal wise what would be the best way to make sure everyone is help accountable for the investment properties? 

Can there be multi people listed on one mortgage ? 

Should we start off by creating an LLC or should we just purchase each property under our personal credit ?

As far as filing taxes at the end of the year how would this affect us?

 Vincent,

One way is to put up an LLC and that LLC will buy the property. The difficulty with this is when you go get a mortgage, specially for a conventional residential mortgage, it will have to be on your personal credit. You can go via the LLC route but you need to borrow money from a commercial lender but the interest rate will be a bit higher. The upside of having an LLC is liability protection.

The other way to do it is to do TIC (Tenants in Common) so all 4 of you are on the title. And then all 4 of you can be the borrowers on the mortgage. The downside is no liability protection but you may want to get a liability insurance to cover all 4 of you if you choose that route.

The impact on taxes will be the same either way as an LLC is a pass-through entity. Now having said that, I am not an accountant so consult your accountant /tax attorney just to be sure.