Quote from @Gregory Wilson: A few things there, Brendan.First, an LLC with you as a member and your (wife, son, pal, etc.) partner as a 1% member will file a Form 1065 which is about one tenth as likely to be audited by the IRS as a Form 1040 with a Schedule E rental activity (which I presume you will attempt to show is an active business).Second, you want an LLC because when your local Alabama handyman drives his girlfriend's uninsured truck into a van load of U of A medical school interns on I-22 when he goes  to get some shingles for your roof, on your business, you don't lose everything you have or ever will have to an uninsured claim. 

It will also allow you to focus more of your time and resources in the actual real estate vs. raising capital which usually leads to poor real estate acquisition and operational decisions because raising capital is your full time job leaving an inadequate amount of time for the real estate.OK, chasing 32unit apartments, acquisition priced between 3.2M - 4.8M.  

That's why I would never had a business partner.

However, alternatives like a Self-Directed IRA (SDIRA), a 60-Day Rollover, or a Roth IRA Conversion can help you avoid penalties.A SDIRA allows you to invest directly in real estate while maintaining the tax advantages of your IRA.

We invest the rest in our business and reinvest all the profits from the business back into the business. 

With 25 years under my belt in construction and corporate environments, this is not the way you do business.

Even as a broker there are many sleazy Account Executives that try to win my business with terms or extra compensation.

It's always important to screen anyone you are doing business with. 

As a mortgage broker, I've got a 100% financing down payment assistance grant that allows for owner occupants to purchase a duplex.

I love that there is no risk of evictions (assuming you don't allow stays for 30 days or longer).