Best way to get out of a FHA duplex without 25% equity. Thoughts?

[Christian Woodberry]

Hey guys,

I'm currently in a situation and I'm not sure what the best "next move" is to continue my investing. About a year ago, I purchased my first duplex with an FHA. I currently live in one side and rent out the other. One side brings me $950/mo and the mortgage is $1,100 so it's been great saving the living expenses.

The FHA saved me a lot of cash on a down payment, so I was able to purchase a single family home shortly after with 20% down. I got this home at $100K and it is currently valued around $125K. My plan is to use the BRRR method, and I'm currently renting this house out with good cash flow. I would love to refinance out of my FHA (duplex) and be able to take out another owner-occupied loan in the near future using the same strategy- move into a multifamily with 3%-5% down and eventually BRRR it. The PROBLEM is that I seemed to have purchased my current duplex right at market value...(yes, I have learned this lesson now looking back).

I've been told that the only way to refinance out of this FHA is to have 25% equity in the duplex. Because I only bought it a year ago and the duplex hasn't really gone up in value, I don't have 25% equity and I probably won't for a while. Has anyone ever been in this situation? I almost feel stuck in this FHA. Would anyone recommend refinancing the single family home in order to help pay equity into the duplex? Should I refi the single-family home in order buy another property below market value, or should I refi the home, instead, to put equity into the duplex and open up another FHA? Any thoughts?