BRRR + House Hack + FHA

[Nathan Hui]

BP People, 

I am considering a Quad House Hack with FHA 3.5% down. I am under contract. It needs work, probably 20k-50k (I have not seen every unit). After renovations the property will cash flow well and ROI will be marginal if the cash stays tied up in the property. Roughly $500 CF and 10% ROI (This is with 8% Vacancy, 10% Maintenance, 5% Cap Ex, and 10% PM). I can get hard money for the renovations but I am wondering if I can get the cash back. Generally people BRRR with conventional loans. I don't know if the FHA component makes things different or if it can be done the some way. Also, I don't know how appraisals will work. I am projecting a rent roll increase from $2100 to $3000. Does that justify a substantial increase in property valuation or will I be making 0.90/1 dollar on everything I put in. I am very confident on where these units need to get to in order to make the projected income. I need to nail down the numbers for renovations and find out if the money will stay tied up. I just got under contract, many things will need to be ironed out before the numbers become solid.

I'm looking for some insight, this will be my first investment. Im sure there are things I am overlooking, any advice would be helpful. If you need more details to help I can provide them.