When I say "capitalize", think of it as just increasing the book value of the inventory... it doesn't have anything to do with an investment asset as the word may make you think.You will record "cost of goods sold" when you actually sell the property.

I heard someone talk about buying a property in an LLC and the selling the LLC with its assets which would probably work to.

Combined they provide about 1K after payments, taxes, insurance, etc.One is valued at $270k (owe 171k) the other value $110k (owe 57k)  I would like to get the equity and continue to build out further assets. 

Tristan,It looks to me like you are looking to fund the deal with private money and have the investors be passive while you and your group lead the way and take care of the asset management.

Ellie - obtain the funds needed to acquire the property  from friend / relative ...pay seller the  cash ...have a private note set up between yourself and donor)   with specific  terms  for repayment ...make sure the  rate  agreed to is  a realistic  market type rate ) and also make sure that a formal lien is  filed for the loan  and also make sure you formally go into the title  .........I would suggest making a separate agreement / arrangement for the  funds  you are  borrowing for the  construction ...... 

I would have to leverage other assets I have or, preferred, private money.Thanks!

I have 10% cash to put down and can get a bank to cover 60% of the Value,  how does someone obtain the additional 30% from open market funds?

They only limit creditors to the assets of the LLC if it becomes insolvent.

My idea was to obtain a bank loan to cover the outstanding balance on their current loan and then create an owner financed note for the remainder of the purchase price. 

Until then, the cash flow should support the asset.