Newbie- Best approach for acquiring two properties

[Zach W.]

Hello,

I am at a cross-roads with my fiance and our financial future. We purchased a house 2 years ago and are looking to start investing in real estate. We both are employed with good jobs, but are looking to start a family soon and I will be the primary bread winner in about two years. Looking at our financial future we have two options that we are evaluating:

Option 1) Use 40K to purchase a duplex in our area for 100-115k and stay in our current home, renting out both units out in the duplex. My concern with this is the properties that are probably the best opportunity will be slightly out of our price range, around 150-175k. If we have 60k of equity I am thinking that it may make sense to take out HELOC or home equity loan to extend our buying power while staying in our current home.

Option 2) We sell our current home. Let's say this would also net us roughly 60k for simplicity, leaving us with 90k in cash total. We would then turn around and purchase a duplex for around 300k with 10% down(property 1) with an FHA loan and owner occupy for one year. We would then turn around and purchase a single family home (property 2) for ourselves after that year has passed. My dilemma here is financing again. If we have an FHA loan already, does this make obtaining a conventional loan more difficult?

Is a 20% down payment usually required for a conventional loan on a second property if it will be our primary residence?

Option 3) I know there are other routes we could pursue, I am totally open to suggestions that you may have or any criticisms.