@Gabriel Graumann actually this is a multi unit property where there are 2 parcels (2 building adjacent to each other 4 units on both sides).we are working with a lender who has agreed to do a conventional loan as it has only 4 units on each side (so 2 applications) - lets see how things go.

You would have to refi your FHA into conventional on the one you live in now, which would probably work and you could be at a better rate also.

I think one of the key things here is that is the lender primarily one focused on conventional/owner-occupied agency loans and just dabbling with investment property loans in a challenging market or a truly 100% focused investment-property lender. 

I could do an all cash, but would prefer to do a conventional loan.

Financing options include conventional loans, FHA loans, portfolio lenders, and private financing.

The goal is to get the property or borrower prepared for conventional financing. 

You can also look into a cash out bridge loan at 80% LTV if the goal is to refinance into a conventional mortgage.

The one issue I think I’ll have on my hands is I prefer to house hack again in the same town (appreciation seems to be great along with rental amounts) but I’ll need to refinance my current house hack into a conventional which I doubt is at 20% equity yet since I don’t think I’ll have a valid excuse to have two owner occupied loans in the same town.

However, if have several rentals and need to deposit checks, or use a debit card to pay utilities and other bills, etc. conventional business bank account would be the best choice. 

We’ve secured pre-approval from Chase for a $200k conventional loan at 8% interest with a $40k down payment for our first rental property.