Can someone become a silent investor to my LLC. Provide funds to make a purchase of a home to flip. If so would I have to pay taxes on the money if no home is bought?

[tagteam]

Is flipping homes the current business activity of the LLC?

Is this a single-member or multi-member LLC? 

Are the funds in the nature of a loan or does the "investor" want a percentage of the LLC as an owner (i.e., will become a member of the LLC).

You really need to seek guidance from a local tax professional and legal counsel.

[Opus 17]

I agree you should seek legal advice, particularly since LLCs are created by state laws, so the laws about investments may vary from state to state.

If the investor is going to buy the property, you will be the general contractor doing the work (or arranging for others to do the work),  and then you split the profits when the home is sold, you are going to have to have some important discussions about how to split those profits to take into account your labor on the one hand and their investment risk on the other hand. 

In general, I can think of four ways this might happen.  These are only for illustration and suggestion purposes, you need to discuss your options with an accountant and/or attorney.   There may be other options I have not thought of. 

1. Mr. X loans money to the business.  The business pays an agreed-upon interest rate regardless of the success or failure of the flip.  Mr. X is not an owner, co-owner, shareholder or anything else of the business or the property.

2. Mr. X becomes a participating partner in the business.  You would change from a single member LLC to a multi-member LLC (or add him as a member if you are already a multi-member LLC).  You will want some written agreement that specifies the level of each partner's participation, the duties and obligations of each partner and how they are rewarded (how the profits are divided).  

3. You change the business to an S-corporation and Mr. X. becomes a shareholder, and everyone who co-owns the business also owns some number of the shares. People who actively work in the business take a fair salary for their work.  Investors who don't actively participate don't take a salary.  All shareholders get a share of the profits (if any) based on how many shares they have.  

4. Mr. X buys the home as the sole owner, and hires your LLC to flip it.  You are the general contractor, do some work, and hire subcontractors as needed.  You get paid for your work based on some agreed-upon schedule.  At the end, Mr. X sells the house and keeps any profit.  

In #1, Mr. X gets paid an amount agreed in advance, regardless of the success or failure of the flip. In #4, you get paid an amount agreed in advance, regardless if the flip makes more or less money.  In #2 and #3, you more evenly share the participation and risks.  

[Opus 17]

Continuing on:

"would I have to pay taxes on the money if no home is bought?"

That depends on who paid what, and what kind of business it is.  Since it sounds like this has already happened you need to see a professional.  Also, where is the money now?  Sitting in the bank waiting for the next property opportunity?  Returned to the investor?  With interest or not?

Money invested in a business is generally not taxable when it is invested.  If the investment turns a profit, the profit is taxed.  For example, suppose you bought 1 share of Tesla when it was $100 per share.  Today it is $240 per share.  If you sold your share, you would owe tax on the $140 increase in price (the gain), not the entire amount.

[Hal_Al]

You're looking for a simple answer to a complex question.  As the other replies suggest, there probably isn't a simple answer.

That said, my opinion depends on how the investor is treating the money.  Is it now a gift to you or is it an uncollectable loan or something else?