Fha loan on first duplex purchase. What's next?

Question

After buying a first duplex using an fha loan, and essentially house hacking, what are options for the next rental purchase if you would want to move into the next place and rent out the first rental after a year? Can fha loans transfer? Will it need to be changed into a conventional?

Joshua Janus · Answer

Do you know if you can house hack again? It doesn't seem to be as simple of a process to repeat it, but I know plenty of people that have done it successfully year after year. I wouldn't close the door on that option too soon.

Jaron Walling · Answer

@Travis Simmons Moving into or buying the next property will come with sacrifices. I'm just saying that because it requires a little work, and more paperwork. From a lenders prospective you'll need 25% down on the next property, if it's not a cash deal. Loans don't transfer. You either sell, ReFi, or pull equity. If your current place is already a rental you'll need to prove that with a signed lease, bank statements, and reserves.

The odds of obtaining another FHA loan are pretty slim and why do it anyways? That loan comes with PMI and strict property condition terms limiting what you can buy. I'd focus on the deal and the numbers first. If it's not penciling don't waste anyone's time. Just learn and move on to the next prospective deal. That's a major difference just between buying and investing.

This conversation could lead into the BRRRR strategy that was all the rage. The main issue with that strategy (it's be done since foreverrr) is it's tough to pull all the money out. That means an investor may leave $____ in the deal. I left about $10K in my first property. I'll never get it out until the day I sell. That's $10K less buying power for right now. It's not a big issue but you can see how this strategy also sucks. When deals are thin you can run out of cash pretty quick. Cheers.