FHA 3.5% vs Conventional 20% down

[Eddie Min]

I live in SF and plan on house hacking a multi-fam property in Oakland, CA to bring down my own expenses. Can I get some advice on choosing an FHA vs Conventional loan? I'm expecting about 4% APR on a 3.5% down FHA after MIP vs 2.875% for 20% down on conventional.

FHA would actually result in negative cashflow, while conventional will generate positive cashflow. The difference between the two will be about 2K each month, which is quite a significant amount. Cashflow would imply going with conventional, but I'm concerned about being able to snowball investments because my cash will be strapped.

What are somethings that I need to consider? Is there a refinance strategy with an FHA that could help deduct the MIP which is tacking on an extra 1% in interest? Would like to hear thoughts on how I can maintain momentum. Thanks BP community!