Money flow for an LLC?

[Ronald Hayden]

Hello!

First post on BiggerPockets, as a huge fan of the podcast. Oddly, I'm a bit proud to have a naive question to start with.

My business partner and I are in the process of creating an LLC, and I realized I have some questions about how money flow works.

I'm planning to make an initial investment in the LLC that will give us the funds required to make our initial buys. But given that LLC profit flows through to the members, I'm not sure how it works to re-invest in the LLC.

The real estate attorney who is setting up our articles of organization said that we should keep the cash in the LLC low, and that we should be "continually dispersing" any profits that came in.

Okay, but we want to be building up the cash available so we can make larger buys over time. Our general plan is to start with flips to build up cash, then transition to buy and holds over time to get passive income.

So how does all this work? Do we "disperse the profits" then re-invest to make a particular buy? Is a re-investment like that considered a loan to the LLC or what?

Any insights much appreciated!

 -- Ron