Real Estate Lending Partnerships

The individual LLCs invest in 123LLC, not people. Unless you have recorded loan docs that each LLC is loaning money to 123, then each LLC is invested in 123LLC as equity partners. 

If they are loans, then you pay interest as an expense of 123LLC. If they are not loans you pay guaranteed payments that are recorded on K-1 in addition to pass through profit.

If loans they ate set up as sshort or long term liabilities of 123LLC, not as accounts receivable unless tgey promised money but did not yet give you any. Receivables are money earned but not collected, certainly not the case here whether a loan or equity.

1. my take is the individual LLC is equity invested and you record money in as member contribution. But if 123LLC has only one owner then each loan is recorded as such and interest paid.

2. interest is an interest expense of 123LLC, not 123Associates. And in this scenario the individual investors get absolutely no profit share.

I read this as:

123LLC has People providing equity to it, or perhaps Lending (Liability). You need to work with your own CPA; no one on the internet can review your formation documents.

123LLC is an Investor, either equity partner or lender to the 123Associates.

123Associates is making loans and collecting interest income + principal from the end borrower.

So, 123Associates is either paying principal + interest to 123LLC as a lender, or paying Equity draws, as a partner. Then, 123LLC is either getting interest income and principal, or just getting draws against their equity position in this other "asset" they own. And when People take draws from 123LLC, that is Draws from Equity, no matter what is the relationship between 123LLC and 123Associates,  so Question #2 is moot.