Best Strategy to use with Private Lender

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I have an interesting opportunity where one of my family members wants to earn interest on his money. He told me he would hold the note on a rental or possibly 2-3. He is older so he said he would want a balloon payment at 5 years. I have been using direct mail for flipping and have gotten more calls on properties that fit better as rentals than flips. I'd rather be able to buy the ones that are great rentals than wholesale them. How would this work? I'd have him buy the property in cash and then pay him the mortgage until I can get a conventional loan? How long do you have to wait until you can refi? It seems like the BRRRR strategy might be better here because then I wouldn't need the 20-25% down payment for every one. Are there any other strategies I could utilize with my lender? What strategy would you use? I'd love to hear from more experienced investors. I am currently working on my first flip and own no rentals but am trying to focus on a niche for acquiring rentals.

Hello and thank you for your question Steve!  The more units you own, the better.  5 years goes by quicker than you think.  Not mentioning his amount of contribution makes any answer fairly difficult.  Needing experience to do apartment instead of houses is a myth.  Whatever you want to do kind of matters.  do not believe those that have not done it.  The work you select should be enjoyable to you.  It all takes hard work to succeed.  Work your way up in the quantity of rentals and when you buy 30 units you can hire a management company and they can

Good deals can easily get financing and take you away from the daily operations.  If residential rentals provide you with more pleasure but there is more competition there and makes acquisition harder and you need to offer cash to compete.  Homes today sell closer to a retail price based on comps instead of income.  Whatever you choose look at rentals as a long term investment.  Good luck to you!