Yes, you would still have to pay income tax on it, but you would likely have deductions from the home purchase to offset some or all of it.Here's a link to the IRS's Exceptions to Early DistributionsClimbing atop my anti-traditional 401k soapbox: cash out and don't look back. 

No oral agreements. 

You can do something similar where your brother in law puts more money down to acquire the property or all the money down if you are paying for the renovations.

Look for one or two partners to fund most or all the deal.

But it is a good deal and it is fun to me to see what kind of you deal you can craft that works for the lender and keeps most or all of my own money in my pocket. 

The chance we took did not pay off as there were more than a half-dozen broken copper lines hidden in many of the walls and floor joist cavities.

.- some tenants will not honor the lease and won't keep up with the lawn or snow removal- slower ability to scale: it'll take a lot more doors with singles vs. multis to reach your number of units or cashflow in mind- value is dependent on the real estate market vs. current income being generated- you can only get loans for up to 10 houses, sometimes less with certain lenders, before having to switch gears and find other ways to financeSingle Fam - Pros- most leases are set up for the tenant to mow the lawn and do removal- the appreciation is usually decent if you buy in the right area- usually more affordable for investors who are just starting out- easier to sell if necessary- easier to analyze the property and run the numbers for the newbie (comps, expenses, expected rent, etc)Multis - Cons- harder to sell if necessary - mostly only investors will be interested in buying the property- you'll have to be sure to budget for lawn care and snow removal (can also be a pro and not con tho)- if it's more than 5 units, most typical lenders will not be able to help you and you'll have to look to commercial or other means- it may take longer to run the numbers when analyzing the property because it depends on the generated income, talking to the right people to get an idea of what it could rent for if certain repairs/rehabs are made, knowing if/how to lower some of the expenses, etc - this is again why it's important to have knowledge on multis and/or a good team to help you with this, which is why it's not always newbie-friendlyMultis - Pros- if a tenant leaves, you still have at least one other tenant still paying some or all of the expenses- the value of the property is tied to the income it's generating, and not the current real estate market, aka YOU have the control over the value of the property, not the market- you have more than one unit under one roof generating cash flow, and therefore the ability to scale faster- commercial loans, in terms of paperwork, are easier to obtainTruly tho, one can't say that multis or singles are always better in ANY given area.

I don't buy anything unless I know I can increase the value by addressing the property's deferred maintenance, or updating the apartments or solving the property's financial underperformance (or all of the above).I created a tool that allows me to evaluate a deal in 5 minutes or less.

If your projections for 20 units only creates $1000 per month you will likely lose money as one bad tenant or one big repair cost like roof or HVAC can wipe out most or all you cashflow. 

That way we have a portion or all of the income guaranteed, we know we will pass inspection, and we have mitigated some of the risk that comes with the area.There is a lot more too it but.. in general understanding risk is a big part of investing.