FHA/Convention Refinancing Questions

[Christine Durrance]

I'm trying to figure out how to strategize financing for BRRRR's. As a rookie, I might sound like an idiot but let me try and break down my questions.

I want to use either an FHA loan or a 203 FHA to finance my first property. My plan is to live in it for 2 years and then rent. Once it's rehabbed, my understanding is that it needs 20% equity to be able to convert/refinance the loan from an FHA to conventional. If I convert it, does that mean that 20% equity has to stay in the property and only additional equity can be pulled out from refinance?

Are there other ways to free up being able to re-use an FHA besides refinancing with a conventional loan that I'm not thinking about?

Ultimately, I'm trying to think of strategies to use low money down options while I build more cash reserves. I hear a lot of people discuss using FHA for BRRRR's but I never feel like much is discussed about how to refinance to a conventional loan, the costs associated with that (cash flow depletion, closings), etc.