First off, I am still looking to do my first deal. As I research the different strategies, I am leaning towards the BRRRR strategy with small multi family units. I have 19 years in construction so renovations feel like a safe space for me. I would love some feedback from the BP membership regarding two scenarios I have been considering.
First, I have family members whom I trust. Scenario one is I am looking for a 2-4 unit building that I can renovate and rent out. My sister in-law and her husband are in a duplex now that has a recent rodent problem. They are looking to move and have the means to increase their rent to $1000. My suggestion was that if I find the right property, I would rent one unit to them about 10% below market rate so long as the units cashflow a couple hundred bucks all together. My thought is to help them out a little bit and the upside would be I would have eyes on the rest of the units. I wouldn't have them doing anything as far as managing and everything would be on paper. I also know they are reliable tenants and would take care of the place as if it was theirs.
Scenario two. My brother and his wife live in Denver. His wife just completed school and is doing well in her new field. My brother is half way through his schooling, working at his college, and well on his way to a 6 figure salary. They are also in the process of rebuilding their credit. They are probably 2 years from being able to buy a home. My thought with them is similar to above. Find a multi-family unit and have them rent one at a fair rate, while just being my eyes on the rest. Unfortunately, I live in Oregon, and do not have anything in place to manage RE from a distance. I do however, trust my brother's intentions and means, making this an option in my eyes. Like before, everything would be in writing so the expectations of all parties involved would be well known.
My concern is that I have no experience in real estate investing and I want to make sure I am not glossing over major potential problems because I would be dealing with family. Thank you for your time and guidance.