Hey, guys - 

So for as long as I've been on this site (first came across it about two years ago) and really gotten a significant interest in REI, I have been attracted to MFH buy-and-holds in lower-income (and probably Section 8) cities in Conn, and then maybe trying out a few flips 5+ years down the road once I'm really secure in my investments and have built up capital. I have been really trying to figure out the best way to get started on the scene, as I'll be buying for the first time, and also teaching in an urban under-performing public school in about a year, so there are several first-time home buyer opportunities available that make a lot of economic sense in my state, though I'm typically most drawn to the idea of a FHA 203k as my first buy, as it seems to include the least amount of restrictions (mostly, just 1 year owner-occupied).

HOWEVER. The more I think about it, I'm sort of being pulled to START my career in REI with a flip in a completely different area, just to give myself a bit of financial backing. There are lots of towns in CT with median home prices well over 300k and awesome school districts (for locals, think West Hartford, Farmington, Orange, Monroe) where you can pick up a scraggler for 150-200k, give it some minor/straightforward rehab (usually kitchen & bath updating, a new face, and just a lot of lipstick) for under 50k, and all of its comps are selling for 350k+.

If using a FHA 203k, for example, I'd be living in and renovating at the same time, then after a year, sell it, and use those proceeds to buy a MFH for $50k using traditional financing, which I would now have the capital to put a DP on AND rehab, with some left over.

I guess my main qualm is that I feel like I'd be wasting an amazing opportunity (FHA loan) on a house that's 40K with 20K of rehab, when I could use that same loan for a 150k house and max out the rehab portion, which could then set me up for success by already having a good flip under my belt AND capital to move forward with. Also, it would keep me from having to live in a MFH in a C- neighborhood for a year (which I don't MIND per se, but it would be great if I could finance that traditionally, you know?).

What do you guys think? Am I being idealistic? Would this be a good tactic?