What would your exit plan be for FHA approach?

[Sean Welch]

1. hello BP. I am fairly new to this site and this is my 2nd post. I am doing all the learning I can do, and am learning every day. I basically have a general question in need of advice. I plan to get into real estate with the FHA loan approach and purchasing a 2 unit home. Let's say hypothetically speaking I'm interested in a home that costs $20,000 and could use $25000 worth of repairs. And has an ARV of $85,000. So in this case I assume I ask for a loan of $45,000? Or do i ask for maybe $50,000 to consider closing costs expenses? Also, what would your exit plan be on such an approach? How do you plan to pay off the debt loan? Thanks in advance

[Shawn Mcenteer]

You can also refi out of the FHA making it a conventional mortgage once you have enough equity. And the use that money to purchase your next unit with another FHA loan. You can use FHA more then once you just can't have more then one FHA loan at a time (in most scenarios).

Also I always recommend to buyer ask your lender what low money down conventional mortgages are offered. You can put down as little as 5% on a conventional mortgage, the advantage is once your reach a certain equity thresh hold PMI goes away. With FHA you must refi out remove PMI.