Need Advice Re: Purchase Investment Property With Friend
My friend and I want to purchase a duplex to hold for at least 5 years and rent it out. I'm a single woman and she's married. How should we hold the property to lessen any personal liability - keep costs down and both have our interests protected and keep everything honest and open. Should we joint venture, partnership, llc, what? We are new to this kind of thing. Thanks for any advice.
You should form an LLC with one of you having 49% interest and the other 51%. This sheilds you from personal liability, is favorable for taxation purposes (even if you have to pay tax after deprecation), and the 49-51 split always keeps one party in charge in case problems arise. Down payment money should be loaned to the company so that the person putting in the down payment will get paid before distributions.
I am not an attorney or accountant. You should definatly seek competent professionals to guide you through your sucess. GOOD LUCK
I feel so uncertain about how to do this. Thank you for your advice.
You should also look into forming a limited partnership. You should be able to find plenty of info on both LLC's and LP's on this site and on the web.
Good luck with your venture.
The cheapest way to accomplish what you seem to be looking for is to take title as Tenants in Common and buy lots of liability insurance.
Assuming that someone gets seriously injured or dead on your property the LLC is going to be of limited value. Only a big insurance policy will save your butt in that event.