Next Property, as Owner-Occupant: Homepath?

[Christian Lautenschleger]

Hello BP,

I have a free evening, so I hope I can get some good responses and ideas for my next property.

In April I closed my first property, a duplex in which I "inherited" two long-term tenants.  I live in an apartment, which lease is up in September, and I'm looking at trading my rent for a mortgage.

There are a lot of routes to take when looking at an owner-occupant: I could because a landlord living in a duplex, I could buy a property in which I want to live for the long term, or I can buy a fixer-upper.  I prefer the latter.

I would like to do a rehab of some sort for my next property.  Preferably, I would like to do a flip in which I purchase the property this fall and fix it up during the mean time to put it on the market during the spring when the market heats up.  And flip (hopefully!) again, and again, and again.

From looking at government programs, I could become an O/O for 3-5% down, depending on if I do an FHA or Homepath loan. FHA looks great, but I don't know how much I want to be tied down to a 1-year stay if I do decide on flipping it (now, if I find a place I want to live for awhile, that's a different story). Homepath has renovation mortgages, which requires much more red tape and leg work on my part (I suppose the same with 203K loans), but...

I'm trying to look at REI from a more corporate, long term stand point. Ostensibly I need to do more legwork at the beginning because I don't have the experience or money to just hand everything off to someone right now. However, if I do some renovation project and need contractors and bids, it wouldn't be the end of the world, because that is something I want to do eventually anyhow; it'd basically be pushing me to do it now, instead of a few years from now. I'm kind of thinking out loud with that. I don't believe Homepath reno loans are for DIY.

I could do a conventional loan and pay for the rehab out of hand, or from a HELOC from my property as well. All-in-all I'm looking for advice to flip my first property, as an owner-occupant. No, I don't have experience at this, but I've never had a problem with teaching myself to do things on my own. I'm still in learning mode, but I obviously want to make good deals and make money while attending the school of hard knocks.

I live in Columbus, Ohio. I really have no qualms with living anywhere decent in the metro area. If I do a 1:1 rent:mortgage, it'd basically need to come out to 500/month PITI.

So, BP, your thoughts?  

Thank you for your replies.