15% on a single family home and 25% on 2-4 units if you're using conventional (Fannie/Freddie) financing.

Investment Info:Small multi-family (2-4 units) buy & hold investment.

When it comes to real estate, here's a general list of eligible assets and their depreciable lifespans that you should know: Residential Rental Property = 27.5 yearsThis includes any building or structure where 80% or more of its gross rental income is from residential units.That means:- Apartment buildings- Single-family rental homes- Duplexes, triplexes, and quadplexes- Mobile homes (used for residential rental)- Any kind of residential lodging facility where the primary purpose is long-term rentalCommercial Property = 39 yearsThis includes non-residential properties like:-Office buildings-Retail stores and shopping centers-Warehouses-Industrial complexes-Hotels and motels that do not qualify as residential rental propertyLand Improvements = 15 yearsThese include sidewalks, roads, fencing, some landscaping, and parking lots that are separate from the building.Personal Property = 5 or 7 yearsPersonal property used in a rental activity usually has a 5 or 7-year life.This includes most furniture, appliances, carpeting and various machinery.Qualified Improvement Property (QIP) = 15 yearsGenerally, this includes any improvements made to the interior of a non-residential building after the building was placed in service, excluding elevators, enlargements, and the internal structural framework.Computers and Related Peripheral Equipment = 5 yearsVehicles = 5 yearsNote that the land itself is not depreciable.

If you're willing and able, I do recommend the "house hacking" strategy which is just a fancy name for buying a rental property and living in one of the units, because you'll get very favorable financing - an owner-occupied fixed-rate 30-year mortgage.I'd also say, analyze that property as if you won't live there and it's a pure rental, and make sure the property is still cash flow positive if there's a tenant in your unit because then you'll know if it's actually a good investment.And when you analyze it, include payment of a property manager in your #s because if you don't, and doing so would make it go cash flow negative, then you've just bought yourself a job because you literally can't step away from managing it without losing money.

To grow a portfolio (ie #'s of units) requires a lot of capital.

Maybe even college housing.I would think that maybe splitting it into two units might be more profitable.

In the event that he moves out in a few years, I would turn the unit into a rental.Questions:1) Since I will be renting to a family member, do I still need to create an LLC?   

I don't think 5+ units gets you to where you want to go. 

Start with Reonomy or Costar to identify all the 100+ units in your target market (on and off market) and then see if you can get into direct contact with some owners.

Investing in  2-4 unit properties within the Dallas-Fort Worth metroplex would be ideal but I am also interested in other potential deals, that fall within the 2-4 unit range.