Im 23 with a house, point me in the right direction.

[Brad Farmer]

Hey everyone, first time poster I found this forum through the awesome podcast done by Joshua and Brandon. I want to tell you my story and get some advice. I am a blank canvas yearning for direction in the real estate game. Lets go.

Ok so im 23, Im finishing up my bachelors in Exercise Science at Sacramento State University. While going there I have been working for my friends dad on X-ray equipment for the last 6 years which has allowed me to buy a house here in Roseville CA with my girl friend. We have a 3 bedroom, 2 bath house with 3 roomates (1 couple, 1 single girl). All the while we are rehabing it ourselves with the help of my GFs dad who is a contractor. While I rehab this house the investment will be minimal but the return will be great! We bought for 285,000 and in 2 years hope to be near the 400k mark. During this time we can ride the market on the house and hope to get some equity and I can finish school before getting my real estate license. Since we only put down 5% we have PMI but are hoping that after a few months of rehab (full kitchen remodel, paint, laminate flooring and bathrooms) we can get an appraisal of 80/20 and get our mortgage down so that we can live rent free.

Im not sure if I was misled, but my bank (UMPQUA) said that in order to buy another house that wont be a primary residence, you need 20% down. Is this correct?

Here are my questions: if you were in my situation what would be your next move? What would you do with the house before or after 2 years?