Financing my first deal

[Daniel Knutson]

Hey bigger pockets community! I am just starting out my real estate venture, and am looking for some thoughts on how to finance my first deal. I want to start off house hacking a three to four unit property, and renting out the house I currently own, which I purchased almost a year ago with an FHA loan. I have about $30,000 in equity, and I am paying close to $200 a month in PMI. I have a couple options from what I can tell. One takes more time, and one is more risky.

My current debt to income ratio is a little bit too high to refinance into a conventional loan and take out equity for a down payment. I talked my mortgage broker, and he said if I could get rid of two of my credit cards, that would be enough to allow the refinance on my current house. So I could spend the next year paying down those credit cards and then look into refinancing and taking out equity. My second option is to take out a second mortgage on my current house and use that as a down payment for a second property. I think that would be a little too much risk for my first deal. What are your thoughts on these options? Can I rent out my current home if I still have an FHA loan on it? Is it best to switch it over to a conventional before renting it out? Is taking out a second mortgage a good investment move?