Buy and sell my personal home over and over

[Jason Kokenzie]

I have started out in real estate investment by accident, by having to move from a terrible real estate market.  I have thoroughly enjoyed though the cashflow that I have received in my first rental property.  Since then I have acquired a few more properties. 

My community is a growing fast and equity is going up! and up! and up!  Is it possible/legal to keep buying my personal residence, holding it for 1 year, renting it out, and then buying my next personal property, and then doing this same process over and over again.  

The purpose...to avoid the 20% down on investment properties!  Or is there something I am missing!?  I figure if I can keep getting in homes for 3.5% to 5%, instead of 20% that would save me a lot of capital.  

Once I get enough capital to start buying outright?  any ideas, thoughts, concerns, etc?

[John Hyatt]

Hi Jason,

Yes, as long as you don't acquire a loan that forbids it. When I purchased my first home in 2011 FHA had a special loan program that was 1% down that I took advantage of and moved in. I had initially planned on living in the house for a long time and keeping it for the rest of my life because it was such a nice house and I got an amazing deal! My company went bankrupt and I decided to sell my house 6 months later even though FHA required me to live in the house for 1 year I had an unusual circumstance and was able to sell early. Long story short, yes! I have since then done your scenario two other times. Purchase a house with low down payment of 5% or less and then renting it out and buying another one a year later. I am working on my third house now. The only downside to this strategy is that if house prices are shooting up as fast as you say by the time you save the money or are able to move it may not be worth it anymore. In Arizona a lot of the houses have shot up fast as well and now it's a normal market again, you have to market/network to find amazing deals.

-John