Hi Biggerpockets community,
My brother came across a great lead on a house and I wanted to get some opinions on it. The house is a really nice house and a great deal. The property needs a little work, but after a $10-15K investment the house would rent for well above market.
My brother asked if my wife and I would go 50/50 on this investment with him. He would own half of the property, putting 10% down (partially funded by our mother) and we would contribute 10% towards the down payment. While working through the details of the loan, our loan officer discovered his credit is low and having him on the loan would bring up the interest substantially. Instead, my mother is proposing that my wife and I finance the full mortgage under our names. After my wife and I closed on the house, my brother and our mother would give us his portion of the down payment as a non-taxable gift (both gifts under $14K limit per giftor) with the intention that we would transfer ownership of the house to a LLC owned by all three of us. Is this even feasible? Can we transfer ownership of the LLC without having to pay additional taxes ourselves? It's a hot neighborhood without question, so it's hard to pass up. We would greatly appreciate advice on the subject? Is this hot deal too hot to handle?
Really appreciate any knowledge or advice you can provide!
