Hello All,

Loooong time lurker - first time poster.  Have learned a lot over the past year!

I own a C corp with one other partner (my brother) - completely unrelated to real estate.  Generally we zero out income from the C corp as salary to the two shareholders so we don't get double taxed.  We have reasons to be a C corp (foreign investors etc).

I've been looking to get into real-estate investments for a while and have had issues with initial funding.  This year, our C corp had a very good year and we have a decent enough windfall which will allow me to take out the capital I would need to invest in my first real estate property (properties).  

I'm struggling with the best way to take this money out of the C-corp in the most tax advantaged way.  If I were to take this $$ out as regular W2 income, the tax rate will be 50% (CA + Federal).  I've come up with two strategies that I could potentially get the cash out without the tax (or reduced cost) and wanted to see what you all thought.  

1) I personally take a shareholder loan from my C corp. I would structure this as a 30 year loan at 3% interest + principle with all the proper arms length paperwork. The loan is an expense for the C corp and this would not be income for me so no 50% tax paid. I would then form an LLC or S corp to buy and hold the real estate in and I would pay back my C corp on a 30 yr basis.

2) Similar to 1, except, my C corp would loan the money directly to my LLC. The LLC would be owned by my wife and myself. The LLC would pay back the C corp on the same 30 yr schedule.

Is this possible?  Would this be considered as self dealing?  Anyone done anything similar to this?

I've seen posters suggest this, but the C corp has always been a real estate investing company.  In may case, the C corp is completely unrelated (we are a tech company).

Regards,

Ash