Good or Bad Idea? NEED ADVICE on Partnership Idea for First Deal

[Dylan M.]

This is my very first BP post, so I hope this is in the proper forum. I'll try my best to be thorough. 

BACKGROUND:

I am married with two young children and am looking to make my first real estate investment. We are interested in long-term buy & hold with strong cash flow potential. While we've looked into single-family homes, we've been strongly considering small multi-family properties (2-4 units) instead.

PROBLEM:

We would love to AVOID forking over a 25% downpayment if at all possible. And because of our family situation, the idea of downsizing to a duplex for a year isn't very enticing. This is where the gears in my head start turning. My sister (who currently rents out her first home as an investment property) is young, single and nimble (ah, I remember those days well). She's also excited at the idea of acquiring more units.

THE IDEA:

My sister and I could partner up and find a suitable duplex, triplex or ideally a 4-plex and SHE would move in to one of the units for a year while we rent the others out. That way, we're able to get into the property with as little as a 3.5% downpayment (which my wife and I would provide). Then my sister moves out 12 months later and we rent out the unit she was living in—splitting everything 50/50 along the way. If we rinse and repeat each year, we could be splitting 20 units in a little over 5 years (ambitious? perhaps. but hey...).

QUESTIONS:

(1) First off, is this even feasible?

(2) Has anyone out there in the BP universe done something similar? 

(3) If so, how have you structured your partnership agreement and what advice would you give?

(4) What sorts of things will I need to do to ensure I'm able to reap the tax benefits of this piece of real estate (i.e. would my sister and I both be on the loan and the deed together, etc...)?

(5) And last but not least—are there things I should be thinking about that I might be completely ignorant to (lender roadblocks, etc...)?

Like I said, I am brand new to the REI world, so at this stage, ignorance is my middle name.

Thank you in advance, I love you all.

-Dylan