Giving loan to a Real Estate LLC

[Rennie K.]

Hi All,
I am new to RE investing. I recently opened a LLC and purchased a single unit property (cash purchase). Goal is to have 4 or 5 units at the moment.
My question:
Is it ok to give out a loan (from my personal savings) to this LLC as start-up capital and charge interest from it?
What are the legal implications?
What are the tax implications?
Liability implications ?
Any input would be helpful.

Thanks!
Shaw

[Ned Carey]

Originally posted by Rennie K:

James,
Are there any benefits I can derive from this (cash) capital contribution that I made - in taxes or otherwise?

Simple answer - No

If it is a single member LLC as Jon said just do it as a capital contribution. With an LLC you can put money in and take it out at will with no tax consequence. (Unless a special election to be taxed as a corp).

The only reason to do it as a loan would be if there is more that one member so that the other member is paying part of the interest for getting the use of your money. - Ned