And yes, fair market value rent is the key to keeping the IRS satisfied with the related party rental.

Getting a third party inspector on your team is important to serve as your eyes and ears on the ground.  

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.  

Both parties make money.

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."

If you are using hard money you need to budget for the points and fees as well as traditional third party closing fees.Repairs: The money it is going to take you to rehab the property plus an extra 10% of estimated repair costs to account for unexpected repairs.Holdings Costs: Here is where a lot of investors get tripped up.

Been reading books and watching videos but I'm more of a hands on type of guy.

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