Advice for a beginner? Here is my plan.....

[Jeff Macdonald]

Greetings! This is my first public post, but hopefully you don't notice (-:

About me: I am a beginner, and have been researching real estate investing for the past month. I've read "The Book on Rental Property Investing" and "The Wall Street Journal Complete Guide to Real Estate Investing", and listened to the first dozen BP Podcasts. My wife is a teacher and I am a school mental health counselor. We want a mixture of cash flow and equity. We are willing to take on moderate risk. We cannot commit a lot of free time, due to full-time jobs and a small child (no flipping/wholesaling, right?). My finances: My wife and I have some equity in our house available for investing, little other debt. 

Plan: I live in a college town that is not friendly to the rental investor (rents are way too low compared to home prices). I am planning to invest in a neighboring town that has more reasonable ROIs on rentals. In this market, I have been able to find some non-distressed properties at about 1% rent/price with out too much difficulty. Seems like around 1.25% rent/price you likely are able to have some cash flow. This seems possible in the neighboring market.

Option 1: Do BRRRR with single family homes, 100% financed with a cash-out mortgage from our home. As a beginner, I don't want a complicated/expensive rehab.

Option 2: Do BRRRR with a small multifamily property, financed with a mortgage (and down payment from cash-out mortgage). We don't have enough capital to buy most multifamily homes without a mortgage. The downside of this second option is it might be hard to finance discounted properties with a regular mortgage. Maybe seller financing? Should I consider seller financing as a beginner?

My goal for my first deal is to have 20% ROI per year for 5 years. Since I am a beginner, I plan to use conservative expense estimates and get a mentor. I will be building relationships with local property managers, realtors, and contractors. To control risk, I want to put down at least 20% on my first property.

Should I do multiple cash out refinances of my own home for each deal? I expect to only do 1-2 deals per year right now.

Do I need a lawyer for my first deal? Even if it is just a small SFH?

Should I consider seller financing as a beginner?

As a beginner, should I even consider a 5-10 unit residential complex?

Any other advice?

Thanks!