Is it possible to refinance an FHA loan to conventional and then get another FHA loan?

[William Edmondson]

Hey there,

Here is my situation. I got a really good deal on my first property, a tri-plex in Atlanta, GA. The property was zoned as a single family and therefore the appraiser was forced to appraise the property much lower than my offer, but the seller accepted the lower number. Anyway, I bought it with an FHA loan and paid the 3.5% down. I have good reason to believe that if I rezone the property properly to multi-family and refinance the property, I will be able to instantly have close to 20% equity.

Is it possible to refinance the property to a conventional loan and then immediately run out and purchase another property with an FHA loan? Saving the 20-25% feels extremely slow for me. I am looking to primarily buy tri-plex and four-plex's to hold. Thanks so much in advance.

[Gualter Amarelo]

FHA is for "Owner Occupant". I have used them 3 times already. The big trick behind them is that you can't have more than one FHA at a time generally speaking (there are exceptions). Which is why I use them to get in with 3.5%, but then I refinance into a conventional product once I know the house will appraise at 25% equity (I always buy at 80% below market value or less). YOU MAKE YOUR MONEY WHEN YOU BUY THE PROPERTY.

You can definitely get a 5% conventional loan as long as the property is zoned residential meaning no commercial space and 1-4 units. 5+units is commercial and a whole of animal. The other contingency is it MUST be owner occupied. If you already own a single family, this one can be hard to pull off... I actually had to sell my single family home in order to get the ball rolling in my investment career, but looking back it was all worth it! I just tied up a single family which will be my 6th door and I'm looking to finance it with 5% down as an owner occupied. I love this one, because I'm getting it at 50% market value = Instant Equity! I'll obviously be refinancing this one as soon as it has aged the 6 months so I can continue leveraging to the MAX!

I am all about using less of your own money to invest. There are grey areas in this business that can work to your advantage, just make sure you have plenty of reserve funds in case things go in the wrong direction. So basically don't max yourself out with this strategy... Houses always need work!

Cheers!