Both strategies have pros and cons, but it depends on your equity, cash flow goals, and risk tolerance.

This establishes the legitimacy of the arrangement and protects against audit risks.

We knew it was a risk and would be wasted money if the sale did not close.

This approach would allow me to learn with each deal and minimize initial risks.2️⃣ Go Straight to Multifamily: Instead of starting with SFHs, I could spend time learning the multifamily business and go directly for a 20+ unit building, maximizing scalability from the start.I have no experience with either strategy.If you were in my position, which strategy would you choose and why?

Low risk property. 

Starting with a single-family can be a great way to start especially if you’re looking for a lower-risk starter project where you can get your hands dirty and learn a ton by doing.

Then she still only makes 2% extra for taking the risk of you not paying versus a bank.

there is no bank, no mortgage, and therefore no due on sale clause.if there is a mortgage in place, and you take the payments over, this is typically referred to as subject-to or sub2 and is much higher risk for everyone involved.

This is a significant risk to the other two parties that are bringing the deal and the money when they could just as easily hire a contractor and keep the equity for themselves. 

I have so much to learn starting out I don't want to add any unnecessary risk or headaches dealing with out of state properties or long distance rentals.