FHA vs Conventional for High Credit Score & Capital Available

[Account Closed]

Hello BP!

I am getting my educational foundation set at the moment, so apologies if this question comes off as amateurish. I also realize this question has been asked here multiple times (I read the threads) but this question is a bit different and I am having a tough time wrapping my head around it. Was hoping I could get some input.

At the moment, I am looking for my first deal. I am currently renting and this deal with be my first home purchase. I am seeking a multifamily unit (most likely a duplex) where I would move into one of the units and rent out the other. I plan on purchasing another unit after a year or two, most likely another multifamily and will probably move once again.

Now here is where I am getting a bit caught up. I have read in multiple places that an FHA loan should be the go-to option for these sorts of purchases. I understand why this makes sense for investors who may not have the cash to put down 20% on a unit. However, what about for those who do have enough cash on hand for the 20% down payment w/ a high credit score?

The monthly payments for the FHA + mortgage insurance is higher than a conventional loan. When I was using the BP Analysis Tool for a few test properties, it was very difficult finding duplexes in my area with semi-decent positive cash flow with mortgage insurance included.

Furthermore, if I continue with my plan moving forward, I hope to purchase another property in a year or two from the first deal. Meaning if I use the FHA for this first deal and decide to finance the second deal with an FHA (if I end up moving) then I will need to refinance the first deal into a conventional loan and use the FHA on the second (I believe). With this comes additional costs for the refinancing (I would assume), not to mention I would have to pay down some of the debt on the first property with cash because I would not imagine my equity to raise from 3.5% to 20% to 1-2 years.

At this stage, I am looking for any feedback here. I think I have my facts straight, but I could also be missing some key pieces of information. I am trying to determine what the best path is for me moving forward, before really diving in.

Thanks in advance.

-Dennis