House Hacking Loan Strategy

[Steve J.]

Hello BP!

I am currently house hacking a SFH which I used a conventional loan for. I am coming up on 1 year, and keep hearing that we are at historically low interest rates so I want to make my next deal ASAP. My plan for my second deal is to buy a small multi family with an FHA loan in the upcoming months that I will again house hack.

Thinking ahead about 12-18 months after this second deal is complete, for my third deal, I want to house hack another small multi family. Since I can only have one FHA loan at a time, I believe I will have to refinance my second deal after 6 months to get out of the FHA and switch to conventional?

If that's the case, will my interest rate go up? Does that mean I should run my numbers for the second deal with a higher interest rate than I'll actually get with the FHA (assuming it'll increase once I refi into conventional)? Will I have to make any additional down payment when I refinance? Am I thinking about this the right way? Am I missing anything here?

I appreciate any guidance/advice you guys can give me. Thanks in advance!

[Bradley Sriro]

Hey @Steve J. why not just leave the FHA in place if you move on to a third property and use another low down payment conventional option for the third property? Otherwise you end up paying unnecessary closing costs for a refi that will take you time to recoup and ultimately eat in to your cashflow. Or conversely, see if you can do a 5% conventional mortgage for the second property and then use an FHA for the third property? I just don't see the benefits of an unnecessary refi. What areas are you planning on buying these multi-family units in?