I was convinced by my landlord/friend that buying and holding multi-family's was the way to go, but after reading books and listening to the BP podcast, I find myself open to some of the other real estate investing methods.

This house needs a new septic system, foundation, siding, roof, and there are mice in the walls despite all the poison I've put out, etc. etc.  

Ken McElroy has some good books on multi-unit investing which it sounds like you are capable of doing with the funds you have available.  

What I have been told is that in order to take advantage of the 3.5% Down we would have to buy our own individual multi family!

I don't know about multi family units, but traditional SFR for management is 10% + 50-85% first month rent on new tenants.  

I have just read David Lindahl's "Multi-family Millions" and "Emerging Real Estate Markets."

I owned 40 rentals which included apartments, duplexes, multi-families and single family homes. 

With that said, if you screen and have systems setup in the area, you'll be fine.

How are you going to syndicate these multis?

My initial focus will be purchasing and rehabbing small multi-family property in the suburbs surrounding Milwaukee, Wisconsin.