Should I use my USDA Loan for a Flip or a Rental?
Hey everyone,
I’m 23 years old and make a steady six-figure income. I’m brand new to real estate investing but I’m very interested in building a rental portfolio long term.
I recently got approved for a USDA loan with 0% down, and I know that’s a pretty valuable opportunity. My concern is that I don’t want to “waste” that loan on the wrong strategy since you can only use it for a primary residence.
One thing that may be relevant is that I have a strong background in residential construction, so estimating repair costs and doing a lot of the work myself is something I’m comfortable with. Because of that, renovations don’t scare me and I can usually complete repairs much more efficiently and cheaply than hiring everything out.
I’m trying to decide between two options:
Option A: Buy a house with the USDA loan, renovate it while living there, and sell it for a profit (essentially a live-in flip).
Option B: Buy a house with the USDA loan, live in it for the required time, then keep it as a rental and start building a rental portfolio.
My long-term goal is to own multiple rental properties, but I’m unsure whether it’s smarter to use the USDA loan to create cash from a flip first or to hold the property as my first rental.
For people who have been in this position before:
Which strategy would you recommend?
Is using a USDA loan for a future rental considered a smart move?
If you were starting over with access to a 0% down USDA loan, what would you do?
Any advice is appreciated. Thanks!