Buying and rehabbing first property to refi to use for investing

[Jobee Vincent Buenaventura]

Hey everyone! Real estate newbie here looking to score his first great deal. Learning a lot from the books and forums!

Here’s a quick backstory:

Saved just enough cash for 20% down for a $300k-$350k home in Northern NJ to move out of my parent’s. I thought instead to use the money to invest. Real estate sounds great after reading some books.

The Plan:

So, in the interest of fulfilling my criteria of moving out at the same time, I am planning to use a 203k FHA loan to rehab a distressed property once I find a great deal. Say if I get it under contract for $220k and then $ some for rehab; putting a percentage down and the rest financed from a lender. ARVs in the area go for $400k to $425k. Then after the seasoning period, I plan to cash-out refinance once it gets appraised. Afterwards, I plan to use this cash towards my next investment property, but will be using this as a primary residence.

All this will be done under my LLC. Does this sound good? What are the risks involved? And thanks for reading!