Should I use conventional or fha?

If he buys the lot and closes then gets a construction loan he could show plans and specs and digital idea to sell.If he is just in contract to buy with builder, he cannot sell, he owns nothing.

There are lower down conventional programs for owner-occupier.

Second, commercial lending isn't as complicated as it seems and in many ways easier than conventional because less regulation.

I understand the strategly of having less people on the mortgage to qualify for more conventional loans before maxing out. 

If the property was purchased using an FHA loan, why don't you refi into a conventional home loan and then go purchase another property using the FHA and house-hacking the new property. 

@Chris ElrodEither buy it from him with conventional financing or see if he will lease it to you and allow you to short term rent the property.

I bought the house with a conventional loan and put 5% down.

Assuming you went conventional with 20% down when you purchased and yielding $175/month cashflow or $2,100/year gives you a ROE of 2100/35,200 or roughly 6%. 

Conventional loan How did you add value to the deal?