Purchasing Condo-Providing Down Payment

[Chris Daliani]

Hello, 

I am currently in the beginning stages of analyzing a potential condo deal.

My future brother in law will be moving to Jersey City in New Jersey. He was in the market for a rental, however I came up with an idea. Since he does not have any funds for down payment to own I was thinking of purchasing a condo with him as a partner/investment.  I would be providing down payment and all up front costs. He would owner occupy for the amount of time required by the lender and essentially rent it back to us. We would then split all profits 50/50 once he moved out and/or sold

The current thinking is offer price of 125k and I am still waiting for expense reports. Taxes are $1,814 and fees are currently $144. Tenants currently pay for utilities. The market rent for the unit is roughly $1,300 as of now. With a little sprucing up and the current market in this area skyrocketing...we might be able to squeeze some more in the future

We would like to purchase this together. I am not sure how to go about this the cheapest way....We would really like to create and put this under an LLC. Would that work? Would it be better to put it in both our names? or separate? I know there are different tax implications as well when we do it certain ways.

Any and all feedback would be great. Thanks

[Christopher Telles]

You may want to have your operating agreement (and understanding between you) stipulate you as the managing member and the future bro-in-law a member.

Since you're putting up the money and have more at risk you'll want to retain decision making control even if practically speaking you'll both will be making the decisions together. 

Check with your lender before creating an LLC to hold title. A lot of lenders apparently don't care to lend to Llc's for SFR.