Extra cash: FHA house hack AND small commercial loan OR BRRRR...

[Logan Snyder]

Hey everybody, I'm pretty new to real estate investing still and have ran into a dilemma. What do I do with my extra savings? So far I've (unintentionally) flipped my first house and am now currently house hacking a duplex. I purchased the first house to fix up for me and my wife thinking we would live there for many years to come. It was old and outdated so I spent all my extra time renovating it before we got married and she moved in. While looking up YouTube videos on house renovations I eventually ran into BP. While my wife was loving the house, I was loving the new idea of real estate investing. We decided to sell our home with a small profit and house hack a $130,000 duplex using FHA financing with only 3.5% down ($4,550). The duplex is only a few years old, but was poorly managed and one tenant had destroyed one side. We were able to get it for a great price, clean it all up, have pest control get rid of the roaches, and repair all the damages myself for only a few grand.

Now, a year later, I decided to refinance into a fixed rate conventional loan. It only took $8,000 more towards the loan, $4,500 closing costs, minor work, raised rent, and self management to turn the 3.5% equity into 25% equity with the refinanced loan. It will cashflow $850 each month once I move out. I did this to free up the FHA loan with intentions on using it again to house hack a more expensive four-plex.

My biggest problem has been finding a four-plex for sale in an area where I could move into that would not be any further away from where I work (already an hour drive each way). Nothing is on the MLS where I could move and I've been reaching out to people off market but I've had no takers so far. Every month I stay in the duplex I'm tying up one unit and losing what could be an extra $850 towards my next investment.

To anyone with more experience or knowledge: I've saved up enough to use $20 - $40K. Should I be patient and wait for a good four-plex to come on the market to house hack using FHA, should I use an adjustable rate in-house bank loan with 15% down to purchase a four-plex in a different area further from my job, should I save up more cash to purchase and rehab a BRRRR, or should I combine some of these options and use all my savings to invest in both a four-plex with a 15% down in-house bank loan while also purchasing a good four-plex with FHA when one comes up? Scaling up with two four-plex's sound's exciting to me and has potential for much more cashflow than what I'm currently receiving from just the duplex, but it definitely comes with more risk having all my savings depleted so quickly. Thank you for any and all advice!