FHA owner occupancy rules

[Ben Coerper]

I'm newly fascinated with the idea of investing in real estate and trying to figure out the best way to get started. I currently have free housing as caretaker of a farm property, where I run my own farming operation. I have some money saved up for a down payment, but not enough to put 20% down on anything in Rhode Island. So I was assuming I'd need to start by investing out of state. But then I had the thought that maybe I could take out an FHA loan on a multi-family property in Rhode Island. I could technically make one unit my "primary residence," and rent out the others. I wouldn't actually sleep there because I need to stay on the farm. But I'm imagining I could get it to break-even for the first year, and then rent out all the units after the required "year of occupancy," and have it really start to cash flow in year 2. I also have a background in construction, so I was thinking I could rehab the unit that I'm technically occupying during the first year to build some forced appreciation and capture a higher rent in year 2. My first question is whether or not this could qualify as "owner occupied." Would I have to prove that I'm occupying it in any way? Is it just a matter of changing the address on my driver's license, bank account, etc? My second question is, does this seem like a crazy idea? Would I be better off just investing out of state somewhere that I can afford 20% down? Thanks for any advice.