The Quick Read: These three are not rival choices, because only one is a legal entity: an LLC is a company that holds title and signs the loan, tenants-in-common is a way of splitting title among owners, and a joint venture is a contract between partners that sits on top of either one. On a hard money loan, the lender cares most about who holds title and who signs. The partner agreement matters too, but it comes second.
- An LLC is the structure most hard money borrowers use, though the requirement varies by lender.
- Tenants-in-common (TIC) puts each owner’s name on the deed, and on a joint loan every owner typically signs for the full balance.
- A joint venture (JV) cannot hold title by itself. It needs an LLC or a deed under it.
- A personal guarantee is common under all three, so none of them makes the loan non-recourse.
- Pick the structure before you apply, because everything downstream keys off it.
The Honest Answer
If you are partnering on one short-term project and want a clean borrower, use an LLC. If two or three people want to own the property in their own names, a TIC can work, but the lender will want every owner on the loan. If you are an experienced operator bringing in a money partner, you will likely use a JV agreement inside an LLC.
What this loan actually costs to carry.
Hard money is sized against the project and priced by time. Enter the deal and see how much the program will lend, the cash required at closing, the carry while you hold it, and what is left at the exit.
Leverage tiers on the current program: 85% with fewer than 2, 90% with 2 or more, 93% with 5 or more completed projects — every tier capped at 75% of after-repair value. Loan amounts up to $5,000,000, larger by exception; terms of 6 to 18 months, interest-only, no prepayment penalty. The rehab portion funds in draws against completed work, not at closing.
Program parameters shown update from Lendmire’s centralized guideline source. Rate, points, and months are editable assumptions, not quoted terms.
Cost cap sets the loan · positive spread
Illustrative estimate only — not a quote, Loan Estimate, approval, or commitment to lend. Rate, points, and months are editable assumptions. Hard money is business-purpose financing for real estate investors, not a consumer mortgage. Leverage on the current program tops out at 93% of project cost for investors with a documented track record, capped at 75% of after-repair value, with rehab funding up to 100% of the documented budget released in draws; actual terms vary by lender, borrower experience, property, and exit. Lendmire is a mortgage broker, not a lender.
That is the short version. The rest of this article shows where each option helps, where it hurts, and how a hard money lender tends to read it. Hard money here means a short-term, interest-only, asset-based loan on a non-owner-occupied investment property, built around the project and the exit plan.
Side-by-Side
The table below describes published industry norms for each structure. Individual lenders vary, so treat it as a map, not a rule book.
| Factor | LLC | Tenants-in-Common | Joint Venture |
|---|---|---|---|
| What it is | State-created entity | A way of holding title | A contract between partners |
| Holds title? | Yes | Yes, as undivided shares | No, needs an LLC or deed |
| Who signs the loan | The LLC, plus guarantors | Typically every co-owner | Whoever holds title |
| Review basis | Guarantors’ credit, experience, project | All co-owners reviewed together | Same as the title vehicle |
| Key documents | Operating agreement, formation papers | Written TIC agreement, deed | JV agreement plus title documents |
| Property types | 1-4 unit residential in most programs | Same, with more lender caution | Same as the underlying vehicle |
| Setup effort | Formation and agreement before applying | Agreement and deed language | Agreement drafted before capital moves |
| Liquidity review | Guarantors’ cash and assets | Each co-owner’s cash and assets | Guarantors’ cash and assets |
Two cautions on that table. First, the JV column is not a third path to the closing table. It describes the contract layered over the other two. Second, a lender’s appetite for TIC borrowers is narrower than for entity borrowers, so confirm it early.
Key Terms Defined
Vesting: how title to the property is held, meaning the exact name or names on the deed.
Operating agreement: the document that sets out who owns what percentage of an LLC, who can sign, and how decisions and exits work.
Undivided interest: each TIC owner’s share of the whole property, rather than a share of one room or one unit.
Partition: a legal process one co-owner can use to force a sale or division of jointly owned property.
Personal guarantee: a signed promise by an individual to repay the loan if the borrower does not.
Guarantor: the person who signs that promise, often the owner of the borrowing LLC.
When an LLC Is the Better Fit
An LLC is the better fit when you want one borrower, one signature authority, and clear rules for who owns what. It is the default for most multi-owner hard money deals for a simple reason: a lender can underwrite one borrower on one deed, and the operating agreement spells out the rest.
Here is why that matters on a short loan.
- Title is simple. The LLC takes title and signs the note. The lender looks through it to the people behind it, but the collateral sits in one name.
- Transfers are controlled. An operating agreement can restrict who may sell a membership interest and set buyout terms. A TIC owner, by contrast, can generally sell or pledge their own share without asking anyone.
- Property-level liability stays contained. BiggerPockets notes that a venture-specific LLC keeps claims against the property from reaching the partners’ other assets.
- The exit is cleaner. If the plan is to refinance or sell, one entity on title makes both easier to document.
Now the part people skip. An LLC does not make the loan non-recourse. Most hard money lenders ask the owners behind an LLC to sign a personal guarantee, and that is a lender convention, not a rule of law. The LLC protects you from claims against the property, such as a tenant injury or a contractor dispute. It does not protect you from the lender.
Also keep your documents ready. Expect to supply articles of organization, the operating agreement, an EIN, and a resolution authorizing the loan. The operating agreement shows the lender who has authority to borrow and pledge the property. If it is vague, the file stalls.
A word on taxes, kept to one point. A multi-member LLC is generally treated as a partnership by default, which means partnership filings and K-1s rather than simple individual reporting. IRS Publication 541 covers how unincorporated groups with two or more members are classified.
Entity-based borrowing is also not universal. Many hard money lenders ask for an entity, some lend to individuals, and the policy varies by lender. Ask before you pay a formation fee.
When Tenants-in-Common Is the Better Fit
TIC is the better fit when co-owners want to hold title personally, keep their shares separate, and accept that each one is tied to the other on the loan. It suits a small group, often family or close friends, that knows exactly who is putting in what.
Under TIC, each owner holds an undivided share of the whole property. Stewart describes it as each owner holding an undivided interest with the right to use the entire property, and shares can be unequal. One owner can hold 70% and another 30%.
Here is the lender’s view of that structure. On a hard money loan, the typical pattern is one joint loan to all co-owners. The lender reviews everyone together, everyone signs the note, and each owner is typically liable for the full balance, not just their share. Many people assume the opposite, and it is the most common TIC surprise.
Why do lenders want every owner on the loan? Because a mortgage on one co-tenant’s share reaches only that share. If the lender had to foreclose, it would become a co-owner of a property it never underwrote. Most lenders avoid that by requiring all owners to sign on the whole property. Separate fractional loans exist, but they are a niche product, and short-term investment lending rarely uses them.
TIC also carries risks you should price in.
- A co-owner can act alone on their own share. ThinkRealty explains that default co-tenancy law lets an owner sell their own share, forces no mandatory expense sharing, and allows partition. A written TIC agreement is how you override those defaults.
- A creditor of one owner can reach that owner’s share. That is a problem the other owners cannot fix.
- A share passes to the owner’s heirs. There is no automatic survivorship, so a death mid-loan can put a stranger on title.
- The agreement matters more than the deed. It should cover sale approval, buyout terms, expense contributions, and what happens if someone stops paying.
One quirk deserves mention. Some investors hold TIC shares through their own single-member LLCs, to get limited liability and keep a 1031 exchange option open. A lender then has to underwrite several entity borrowers on one property. Many will not, so treat it as a case-by-case structure.
On the exchange side, TIC rules come from a 1031 framework, not from lending practice. A practitioner summary of Rev. Proc. 2002-22 describes a 35-co-owner cap and unanimous approval for major actions. Those rules help a TIC be treated as co-ownership rather than a business entity. They do not tell a hard money lender how to underwrite you.
When a Joint Venture Agreement Earns Its Place
A joint venture agreement earns its place when partners bring different things to the deal, such as capital from one and project skill from the other, and need the split written down. It is the right tool for roles, contributions, profit splits, and exits. It is the wrong tool for holding title.
Here is the practical picture.
1. The partners sign a JV agreement.
2. The partners form an LLC, or place themselves on a deed as TIC.
3. The lender underwrites that vehicle, and the guarantors sign.
A JV with no entity and no deed is not something a lender can lend to, because the collateral has no owner to pledge it.
A JV agreement should cover contributions, management authority, distributions, transfer limits, and what happens on death, divorce, or default. Without it, a partnership can form by accident. IRS Publication 541 says a group that carries on a business and divides profits is generally a partnership, while mere co-ownership of rented property generally is not. The line moves when the owners provide services to tenants.
The JV agreement also has to match the loan documents. A partner agreement that allows free transfers can collide with a lender’s consent requirements. A buyout clause can run into a loan that cannot be assumed. Have the agreement and the loan terms read side by side before you sign either one.
How a Hard Money Lender Reads Each One
A hard money lender reviews the property, the plan, and the exit first, then the people who guarantee the deal. Across the wholesale network, the structure you choose shapes who has to be reviewed and what documents you must produce. It does not change the project fundamentals.
Hard money programs here are built for non-owner-occupied residential property, generally 1-4 units, with ground-up construction going to 10 units. Terms run 6 to 18 months, interest-only, with no prepayment penalty. A credit score around 620 is the floor, with additional conditions below 660. Leverage tiers follow documented completed projects. A fix-and-flip typically reaches 85% of project cost with fewer than two completed projects, 90% of project cost at two or more, and 93% of project cost at five or more. Every tier is capped at 75% of after-repair value. All of this varies by lender, property, and experience, and none of it is a commitment to lend.
Why does that matter for structure? Because the top leverage tier is reserved for experienced investors. In a JV where the experienced operator and the money partner both sign, how a lender credits the operator’s track record varies. In a TIC with mixed experience, the weakest co-owner can drag the file. In an LLC, the lender looks to the guarantors, and your operating agreement tells it who they are.
Different lenders weigh these things differently. Some focus on the strongest guarantor. Some blend credit when two guarantors sign. Others want every principal above a certain ownership share on the loan. The pattern across the network is that questions about vesting, guarantors, and who signs are best settled before an appraisal is ordered.
Mid-Loan Events: Where Structures Break
The structure you pick matters most on a bad day. Here is how each one handles the common problems during a short loan.
- A partner stops cooperating. In an LLC, the operating agreement governs votes and removal. In a TIC, a co-owner can still sell their own share, but the lender’s consent terms usually limit what happens to the property. In a JV, the contract is your only remedy.
- A partner dies. An LLC transfers membership interests under the operating agreement. A TIC share goes to the owner’s heirs. In both cases the loan stays outstanding, so plan for who steps in.
- A partner is sued. An LLC’s membership interest is generally harder for a creditor to reach than a TIC share, though state law varies. A TIC owner’s creditors can attach that owner’s share.
- A partner wants out. An LLC can have buyout terms written in advance. A TIC owner may demand partition unless the TIC agreement waives or restricts it. A JV follows its own exit clause.
Do you need a lawyer for this? Yes, particularly for TIC and JV. The point of the paragraph is that these events are predictable, so the document should answer them before the loan does.
Planning the Exit Before You Buy
Hard money is short by design, so the vesting you choose at purchase should work at the exit. If the plan is to sell, the buyer’s title company will want clean authority to sign. If the plan is to refinance, the new lender will want a borrower it can underwrite.
Many investors refinance out of hard money into long-term rental financing once the property is stabilized, and Lendmire brokers that path through its network of DSCR lenders. The complete DSCR loans guide walks through how those loans work. The takeaway for this decision is narrow: changing title after closing can trigger lender consent issues, so choose a structure the long-term loan will also accept.
On a cash-out or rate-and-term refinance, hard money leverage typically reaches up to 65% of value, so equity needs to be real. As a rule of thumb, an LLC is the structure most easily carried from a short-term loan into a longer-term one. A TIC can be carried through too, but every co-owner has to stay aligned and stay on the loan.
The Verdict
The LLC is the strongest default because it gives the lender one borrower, gives the partners one rulebook, and carries best into a refinance. But the LLC is only as good as its operating agreement, and it does not remove the guarantee.
TIC is a fair choice for a small, tight group that wants to hold in personal names and understands that every owner is exposed to the whole loan. It is a weaker choice when partners have uneven credit, uneven cash, or uneven patience.
A JV is not a competitor to either. Use it when roles and capital are different, and put it inside the LLC.
A decision shortcut:
| Your situation | Lean toward |
|---|---|
| One operator plus a money partner | LLC with a JV agreement |
| Equal partners, one project | LLC |
| Family or close friends, personal title | TIC with a written agreement |
| Mixed credit and experience | LLC, with guarantors chosen early |
Whatever you pick, settle the cap table and the guarantors before money moves.
This article is general education, not legal or tax advice. Tax treatment can depend on how the funds are used and how the property is held, so keep clear records and speak with a qualified attorney or CPA about your own situation before choosing a structure.
Frequently Asked Questions
Do hard money lenders only lend to LLCs?
No. Many prefer or require a borrowing entity, but some lend to individuals, and policies vary by lender. If you plan to buy in your own name, ask early whether the lender will accept it for your property and project.
Does every tenant-in-common owner have to sign the loan?
Typically, yes. Lenders generally want every co-owner on the whole property so that a foreclosure does not leave them sharing title with a stranger. On a joint loan, each signer is generally liable for the full balance. Separate loans on fractional shares are a niche exception.
Can a joint venture hold title to the property?
No. A joint venture is a contract, not a title form or entity. Title sits in an LLC or in the partners’ names as co-owners, and the JV agreement governs the money, roles, and exit between them.
Can I move the property into an LLC after closing?
Sometimes, but treat it as a request, not a formality. Moving title can conflict with the loan documents and may need the lender’s consent. If you know you want an LLC, form it first and close in its name.
What happens if one partner defaults or leaves mid-loan?
It depends on the structure and the documents. In an LLC, the operating agreement drives the answer. In a TIC, the co-ownership agreement and the lender’s consent terms do. Either way, the loan stays outstanding, which is why exit and default clauses belong in the paperwork before closing.
Next Step
If you are buying, rehabbing or refinancing an investment property on a short timeline and want to see how the numbers work, Lendmire can help you compare hard money options based on the project, the exit plan, leverage, and your goals. Lendmire is a broker that arranges financing through select lenders in its wholesale network.
For current guidelines and terms, see Lendmire’s hard money loan programs page.
About Lendmire
A non-QM mortgage broker (NMLS# 2371349), Lendmire arranges DSCR financing for real estate investors in 41 markets — 40 states plus Washington, D.C. Because deals are underwritten primarily on property cash flow rather than personal income documentation, the structure suits self-employed buyers and entity-owned portfolios. Lendmire places loans through wholesale investor lenders; it is not a direct lender. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. BiggerPockets: What Is a JV in Real Estate
4. ThinkRealty: Combining Ownership With a Tenant in Common Agreement
5. 1031 Exchange Place: Understanding Rev. Proc. 2002-22
This article is part of Lendmire’s hard money loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How to Handle a Servicing Transfer on a Hard Money Loan · Cash vs Gap Loan vs Hard Money Modification for a Scaling Flipper · How Much a Hard Money Loan Funds in a Sibling or Partner Buyout
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Important disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage brokerage. Lendmire is not a direct lender, depository institution, or financial advisor. All loan inquiries are subject to lender underwriting; this article does not constitute a commitment to lend. Rates, terms, and program guidelines are subject to change without notice and vary by borrower profile, property type, and state. Information in this article is general in nature and is not financial, legal, or tax advice. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.