Advice for compounding house hacking

[Daniel Kaplan]

Hey everyone,

I am graduating from college in 2 years. Immediately after graduation, my goal is to perform a house hack on a 3-4 unit. After a year of living in it, I want to rinse and repeat as many times as possible. However, as I was thinking about the strategy, a big issue came across. Let's say I am able to get a 96% LTV on the first quadplex and after a year that LTV goes to 93% from the equity gained. Do I need to refinance into a conventional loan in order to qualify for another FHA loan?

[Andrew Postell]

@Daniel Kaplan Thanks for the post here. I would absolutely recommend using a FHA loan to purchase a 2-4 unit if you can. I will say, in this current environment buying a 3-4 unit is very difficult. There are some FHA rules to how much the rents need to be to qualify. Those rules do not exist for 2 units. But let's say you execute on it anyway. You can use an FHA loan again...but you would have to move pretty far away to use it. So if you are staying in your area, we just purchase a single family home (SFH) with the 5% down or maybe a SFH with an Accessory Dwelling Unit (ADU...or otherwise known as a Mother-in-Law suite or garage apartment type of setup). Things might change in 2-3 years so I wouldn't worry about these nuances yet. Just focus on graduating and having your funds ready to execute on that first FHA property.

Hope all of that makes sense.  Thanks!