Future financing and protecting personal asset questions

[Justine Ade]

Hi All, 

I'm in the middle of fleshing out a strategy for our first real estate investment. 

Current plan is to get an FHA loan on one duplex that is newer construction. Because the down payment is so little, even with a renter we would be cash flow negative overall with this one duplex in the first year. However, I'm planning on also getting another duplex nearby with a conventional loan and 20% down which will cash flow positive and cover the cost of the duplex I am getting with an FHA loan.

Two questions. 

1. We were planning on moving out of the duplex after 1-2 years and buying a permanent home. Will lenders still loan us money despite the debt we have from the duplexes above ? Our debt to income ratio even with two high incomes would not be favorable. My husband also does still have student loans that we are purposefully not making extra payments on because of the low interest rate he has on it. We’ve otherwise maxed out all tax favorable accounts, have an emergency fund and we both have excellent credit scores. 

2. We are fortunate to have jobs that earn us higher income but with that, I also want to protect our personal assets. Most people will do this through an LLC but if we form one, we cannot get an FHA loan . Are there other ways to go about protecting personal income ? What would be the pros and cons of getting good umbrella insurance vs. an LLC? Appreciate any advice.