Buying a rental with an FHA but not living in it

[Kenzie McIlvoy]

My husband and I are wrapping up over a year long live in flip at our lake house that we plan to make a STR in the spring. We are under contract to sell our LTR and want to replace it with a second STR. Because we lived in that property over 2 of the last 5 years we don't have to worry about 1031.

We planned on purchasing a property with a DCSR loan but our realtor strongly advised that we do an FHA loan instead. We told him that we do *not* plan on living in this property and we plan on buying another (our dream home) sometime in the spring. He has more than insisted because of low down payment and interest rate, comparatively. We've never heard of using an FHA for a property that's not your primary residence and don't know if this is possible and what the consequences would be. We want to invest the right way but more importantly, we don't want to jeopardize our financing for our primary residence here in a few months. He suggested using a conventional loan in the spring for our primary residence. Our realtor is also on board with this and stating that this happens all the time.

We are on a journey to build our wealth and getting very close to financial freedom but we want to do it the right way. Any thoughts or advice would be so helpful. Thank you!