1st property with FHA - whats next??

Question

Hey everyone newbie here

I just bought my first property using an FHA loan with down payment assistance. I plan on buying another property within a year. Can I do a 1031 exchange into a fourplex with an FHA loan or should I refinance or take out a HELOC?

Or are there any other methods worth reading up on?

I genuinely appreciate the advice

Dave Foster · Answer

Account Closed, I'm guessing that an FHA loan including down payment assistance probably has some requirements that it be your primary residence.  As long as you live in that property you cannot sell and do a 1031 exchange.  You'll first have to move out and convert the property to investment.  Once you've held the property with investment intent (usually a year although no specific time frame) then you can do a 1031 exchange.

It is perfectly fine to combine a 1031 exchange with a MF purchase using an FHA loan.  4 units or less are seen by FHA as a purchase of two properties - one primary residence and one investment property.  If you're combining this with a 1013 the value of the investment portion must be equal to or greater than the amount of the property you are selling.

Erickson Sainval · Answer

If you sell in a year you can 1031 into a fourplex and use FHA. If you build enough equity you can heloc to get into the next deal. You could also refinance conventional with enough equity so you can get the next property with FHA. It all depends on how the market ends up, and your position financially.