Advice for compounding house hacking

[Daniel Kaplan]

Hey everyone,

I am graduating from college in 2 years. Immediately after graduation, my goal is to perform a house hack on a 3-4 unit. After a year of living in it, I want to rinse and repeat as many times as possible. However, as I was thinking about the strategy, a big issue came across. Let's say I am able to get a 96% LTV on the first quadplex and after a year that LTV goes to 93% from the equity gained. Do I need to refinance into a conventional loan in order to qualify for another FHA loan?

[Andrew Postell]

@Daniel Kaplan Thanks for the post here. I would absolutely recommend using a FHA loan to purchase a 2-4 unit if you can. I will say, in this current environment buying a 3-4 unit is very difficult. There are some FHA rules to how much the rents need to be to qualify. Those rules do not exist for 2 units. But let's say you execute on it anyway. You can use an FHA loan again...but you would have to move pretty far away to use it. So if you are staying in your area, we just purchase a single family home (SFH) with the 5% down or maybe a SFH with an Accessory Dwelling Unit (ADU...or otherwise known as a Mother-in-Law suite or garage apartment type of setup). Things might change in 2-3 years so I wouldn't worry about these nuances yet. Just focus on graduating and having your funds ready to execute on that first FHA property.

Hope all of that makes sense.  Thanks!

[Ryan Thomson]

@Daniel Kaplan if you want to use another FHA loan you will need to refinance out. This will be a challenge to do after only one year. You have a couple options:

1. You can live there until you can refinance.

2. You can buy a duplex or single family with 5% down conventional loan at the end of the next year as your next primary. 

[Daniel Kaplan]

@Ryan Thomson Could you make the argument that I could get another FHA loan if I was forced/choose to relocate?

[Ryan Thomson]

Here is a good article explaining how you could more than one FHA loan at a time: https://www.experian.com/blogs...