After purchase loan to fund return of capital
Hi,
I am making a go at RE investment for the first time, I have some of my own capital that I will be using to pay 100% cash for 2-3 single or small multi unit homes. I will be rolling these homes into an LLC. However, I do not wish to keep all my capital in these properties indefinitely. I would like for the LLC to obtain a "portfolio loan" and then return capital to me from funds obtained from that loan, in effect getting leverage I would have had if loan was taken at first.
The reason I am doing this is I wanted to get in on a hot area quickly, before I could obtain such a loan, and also after ~1 year of history of profit/loss within the LLC my thought is I would get better financing terms for such a loan.
My questions are: does all that sound like something that will work? Namely will a financier be ok loaning an LLC money knowing the use for it is a return of capital? Will the return of capital be seen as such from accounting perspective, and hence not subject to income taxes?
Thanks in advance
A