Best use of $300k cash to start real estate investing?

[Adam Wodka]

Hi all-

First off, I've already learned so much from this community and am so grateful to those who take the time to offer their thoughts and are so willing to help others.

After GCing the renovation of my rowhome in South Philly and catching the itch, I am looking to start rehabbing properties to both flip and hold. My goal is to operate two rentals and execute one flip in the next 12-15 months, with the intention of starting to build a rental portfolio while also generating some short-term profit with the flip. 

I've read a fair amount about how to get started without much cash on hand, but, frankly, my income is low as a result of the pandemic and I'm not super liquid after completing the renovation of my house, so I'm not sure conventional financing routes will be available to me. I'm comfortable with the hard money lender approach, but for the rates available to me (~10-11% interest, 3 points upfront, ~$1,200 processing fee), I figured I might as well ask a few high net-worth friends if they would be open to acting as investors and offering more favorable terms. I'm lucky to have friends like this in my network, and they have agreed.

As currently planned, I will borrow a total of $250-300k split between two investors. This brings me to three main questions:

1. Financing – My investors are flexible with repayment options and we have discussed a mix of fixed interest and/or profit-sharing. My thought right now is to keep it predictable and offer them a fixed interest of, say, 8% on the money. I'd prefer to have a get-in/get-out relationship so that we can go our separate ways if it goes less-than-stellar, rather than continuing to own properties together. A negative of this approach is that I'd be paying interest on the money regardless of how much I'm using at that moment, but I like the freedom of using the funds as I see fit (for rentals or flips). I know there's a lot of flexibility in how to structure private money deals, but any creative ideas for use of this cash that leave me owning my rentals and leaving the end of the year with some returns in my pocket?
2. Strategy – I'm still kicking around ideas, but one idea is to start with one or two lighter rehabs to set up as rentals, refi each after renting them out, and use the cash I'm able to finance out to purchase a flip. Essentially, my plan would be to purchase one property at a time in cash until either refinancing the rentals or selling the flips, and then moving on to the next one (BRRRR-ish). I'm afraid this isn't leveraging the cash very well though, and ideally I would like to be able to move on to the next project before refi-ing/selling the previous property. Any ideas here to use the cash most effectively to pursue multiple projects in a year?
3. Ownership structure – Since I'd prefer to just pay them out for the cash as essentially a loan, I'm thinking it will be best to just have my own LLC, rather than name them as owners of the LLC. I was originally exploring S-Corps and C-Corps, but I think for just starting off with some small projects, it doesn't yet make sense to pursue a complicated structure. Does that sound right?

Thank you again so much for any thoughts you may have.

-Adam