Hi, I’m new to rei and am looking to purchase my 1st property this year. I want to do the brrrr strategy but would also like to house hack. Is it possible to purchase a small multi fam with hard money, rehab, rent, and refi into a fha loan? I don’t have a lot of money to put a 20% down payment in this market so an fha loan would be ideal. Someone please enlighten this newbie.
@Edwin Cruz Ooooh... not sure on that one. Have you explored the 203K FHA loan? It wraps in purchase and construction for the FHA buyer.
@Edwin Cruz I guess in theory it might be possible - but I don't think there's any benefit to you in doing it that way. An FHA loan only needs 3.5% down so you don't need 20% for an FHA loan if that helps in any way. If you were thinking of something else please let us know but I think just using an FHA loan will give you benefit enough.
@Andrew Postell @Whitney Hutten I guess what I’m trying to do is buy a distressed property, under market price that probably wouldn’t pass fha inspection, rehab it and then cash out refi with fha at 75% arv. If it’s even possible. Or if I have enough equity after rehab, do I have to put a down payment for a refinance?
@Edwin Cruz in theory what you are describing might be possible but it's not realistic to expect this to occur. If you find a distressed property, the FHA renovation loan will require you to roll in your renovations into the loan. So you would have to find the deal of the century to be able to get a cash out loan using this strategy. I hope this makes a little more sense.