Every payment, including down payment and monthly payments, will have 3 parts: taxable interest, taxable capital gain and tax-free return of basis.

Your taxable gain / loss will be sales price less cost to sell less your adjusted basis.

We had access to one and were about to sell but the irs told us we had to pay it all IRS has nothing to do with property taxesIn addition at death the taxable value is adjusted to the value at time of death. 

Here’s why it might be a smart move:Maximize ROI: With leverage, you can control a larger asset value with a smaller initial investment, potentially increasing your returns as the property appreciates.Preserve Liquidity: Keep your cash available for other investments or emergencies while still participating in lucrative real estate opportunities.Tax Benefits: Deductible mortgage interest and expenses can lower your taxable income, enhancing profitability compared to an all-cash purchase.If you have the means to buy with cash initially, you can later refinance to unlock equity for further investments or improvements.

@Stetson Oates, Thanks, and you are right, market conditions would limit how much of the initial funds one would be able to withdraw.I should also add that, while I am not an accountant or tax professional, it appears that at no time in the strategy above would one trigger a taxable event, since you're not selling any stocks or property. 

(Another option to the above scenario is to instead have the LLC lend my father money to complete the rehab so all the repairs are made in his name...but then the LLC would get no tax deductions on the rehab, plus my father would wind up paying interest on the loan and the LLC would incur taxable income on the interest of the loan as well.)I've said a lot here, but It would be greatly appreciated if anyone can give me advice on the best strategy to pursue...Thanks!

You want to make sure it will not be a taxable event.

You want an LLC for ease of administration, trusts are kind of annoying as they can act as their own taxable vehicles as opposed to single-member or pass-through entities that an LLC can provide.

You want the flexibility to access your money sooner.4) Tax Benefits from Real Estate: When you invest in real estate, you can take advantage of depreciation and losses to reduce your taxable income today.

The IRS wants you to pay taxes on the depreciation you previously claimed as deductions since it reduced your taxable income.