I just bought my first rental property
I created a company to buy are rent a condo in 2020. I borrowed 120K from a relative to buy this investment property. I bought the condo for 118K and used the rest for make ready. I now have a tenant who is paying me $1300. I have a maintenance fee of $500 per month. Taxes are $3500 per year (Texas). My agreement to pay back the loan is that once we get profitable I will pay it back. My relative is not asking for interest on the loan.
In this scenario I would generate $6100 per year with out taking in to consideration any other expenses. ($15600-$6000-$3500 taxes) Raw income.
Since I owe $120K am I correct in thinking that I didn't make any taxable income because I owe for the investment?
Do I need to pay back the $6100 in order to show "break even"
My long term plan is to buy another property with the profits from the first loan. Not paying it back always having a payable account and reinvesting the original loan. So ideally I don't want to pay it back and keep buying new properties.
Am I wrong thinking my company won't show a profit and wont have taxable income on this path?