Should I be using FHA loan numbers in analysis for house hack?

[Tyler OBrien]

Hey there BiggerPockets community! 👋

I have been actively trying to purchase my first home/investment property (2-4 unit house hack) over the past two months in the Phoenix-Metro area and so far I have put in offers on 5 different properties, but keep getting outbid. Currently in my analyses, to calculate my mortgage expenses, I am using the numbers from the FHA loan I plan on using to purchase the property. With this, I am trying to make sure I am cash flowing at least $50 a unit once I move out of the property in a worst case scenario (accounting for all other expenses besides mortgage such as property tax, insurance, repairs, vacancy, cap ex, etc.).

However, I recently heard a real estate investor say to always use commerical loan numbers in real estate investment calculations (25% down, slightly higher interest rates, no mortgage insurance), even if I plan on originally using an FHA loan to purchase the property. Is this correct? If so, it would increase the purchase price on most of my offers, making my offers more competitive. Also, I do plan on refinancing out of the FHA loan once the property has a 75% or 80% LTV ratio.

Should I switch to using commercial loan numbers in my calculations, or should I stick to using FHA loan numbers since that is what I will originally be purchasing the property with?

Thank you in advance for any advice!!