What would you do?

[Valerie Young]

I am currently very interested in a 4 plex in my area.  I do have a private money lender (my mother in law) willing to lend us $60,000, which would cover the purchase price of the building.  Fortunately the building doesn't need a lot of rehabbing, just needs a new coat of paint and we would replace the water heaters, along with a few other low cost expenses.  My initial plan was to loan the money from her, make monthly payments, and then refinance next summer and pay her back completely.  But then I found another 4 plex...  I haven't seen the inside of the property yet, but seems (from the outside) to be in good shape and is also going for $60,000. 

We are having a little difficulty with financing through a bank because of the big down payment along with having 6 months reserves. We currently have 5 SFR (and our personal mortgage). So my question is should we purchase the first 4 plex with private money or should we use that money to fund two down payments (potentially) and then have the finances to prove our 6 months of reserve? Both properties have a lot of equity in them at this price, so would you refinance them after 6 months of possession to pay off my private money lender?

Thanks for any advice or insight!!