To answer your question (and this is my take on it):  Considering you just started your Real Estate Investment firm, you may want to start small and work your way up unless you feel you can handle the greater responsibility of managing a four plex vs a single family residence.  

My question is should we each apply for personal loans using our individual 20% down payment for a small business loan then pool the money in the LLC and use it to buy the properties.

In terms of buying a small multi, have you considered living in one of the units?

We live in the top unit which is 4bd 2bth, nice finishes, all wood floors, nice deck, small backyard, two car garage.

Buy a small multi and live in it.

Hey Ron, welcome.I used to work a self-employed job in NYC that was also very unpredictable with ups and downs, and in 2015 [and years leading up to it] moved to Poconos specifically for airbnb, starting with a small tiny cabin, and it worked out since.

If something is behind the wall it seems to be a small area that would need remediation.

YUP most dangerous loan to do is a small second behind a large first for rehab purposes.. 

@Luis Moran I am also constructing a small duplex.

I recently got a small loan to get a head start on my credit since I have no credit history.