How to get started - Finding and Funding my First Multi

[Joe Schmitt]

I would appreciate input on my situation.

I want a multi-family residence that I can use the BRRR strategy for. I need to get an off-market property (probably a duplex) that I can purchase, add some lipstick to, and refi. I'm not sitting on a pile of money, but I have a little cash to play with.

Finding - I looked into buying a list of distressed multi's (2 doors or more) within 10 miles of my house. There were about 1,400 properties. The list company wanted $600 for the list. It would be about $900 to do 1 mailing through Yellow Letters.  This seems ridiculous.  I have considered 3 other marketing strategies:

1. Calling landlords who are renting properties and asking them if they want to sell. I would find said properties via Craig's List and/or driving for dollars. I would add all numbers to a CRM and follow up twice a year.

2. Bandit signs in neighborhoods that I am targeting that say "I buy rental property" with my phone number. 

3. Asking a realtor to pull all of the multi-family properties that have gone off the MLS (not sold) in the last 6 months and trying to contact the owner directly via tax records.

Funding - There are not a lot of multi's near me and they simply don't fit my family situation. As such, a duplex with a 3.5% down FHA will not happen for me. I figure I need about $40 grand for a down payment and I will use hard money for rehab costs. I am considering the following options for the down payment:

1. Using a HELOC against the ~$100K that I have in untapped equity in my present home.

2. Getting some kind of interest only loan from a family member for the down payment that I will pay off after I refi.

3. Self-directing some IRA money that I have

4. Taking out a loan against a former employer's 401(K)