Hard Money to FHA or Straight FHA for BRRRR

[Sawyer Hambley]

After speaking with lenders, they have clarified to me that the FHA loan amount is based on the appraised value after repairs and not merely the amount of the purchase price plus the cost of repairs. I sought to clarify this because I did not want to go through an FHA 203k and not received any value-add or increased equity from the opportunity. My question is however if it's still worth it or if it's a better option to get a hard money loan to finance the purchase and repairs and then refinance into an FHA 203b loan (house-hacking a first time home buyer duplex) in order to maximize the returns on the appreciation after repairs.

This comes down to the value found after appreciation and whether an FHA 203k will stunt the assumed value. 10k differences can make or break this opportunity. If anyone feels inclined to mention worthwhile improvements I'd very much appreciate them.