Thats a federal backed loan that carries a PMI. you could do a conventional loan and still pull money out doing the BRRR strategy. 

Property investing carries with it inherent risk, which means failure is part of the package.StubbornnessStubborn attitudes about investing generally don’t find much success.

Originally posted by @Carrie Knecht:Having used an FHA renovation loan, I just want to say that while they help you when you really need it, they make the process a lot more complicated.

If you offered her $260k for her house, with 10k down and she carried the $250k for 20 years at 4% your payments would be $1515/mo plus taxes and insurance. if you truly think your paying $370k and only screwing her out of $30-$60k, then your payments should be $2,180/mo, assuming she agrees to just 4% interest  Imagine I asked you to give me something worth $360k today and I’d make payments back to you over the next 20 years of $1500/mo.

Most properties will show a depreciation/paper loss for at least 7-10 years without it so you’re just carrying forward losses unless you plan to sell in 3-5 years btu then your trapped in 1031’s forever or paying 25% depreciation recapture instead of 15% capital gains, you’ve actually increased your taxes. 

Would those responsibilities carry outside state boarders? 

In a 1031 don't you carry-over the exchanged property's depreciation balances into the new property (to the extent of the 1031 money)?

Conversely, you can certainly use a HELOC for buy & hold property, but there are some gotchas (assuming conforming loans for your refi):Cash-Out Refi before 6mo'sIf you refi before 6 mo's, you can only cash-out up to your original purchase price, which parks a fair bit of equity in the property, such as all your rehab costs.With a HELOC, you might end up with an open balance after the refi, such as if you sourced both purchase & rehab from your HELOC.With cash, you'll walk away with less cash than you invested but will have no open balances to pay.A hybrid approach might be to use HELOC for purchase and cash for rehab.Cash-Out Refi after waiting 6 mo's, aka a 'seasoned refi'Presuming your BRRRR numbers work out as intended, you should be able to recover your investment and still have equity required by the refi lender.With a HELOC, you'll carry at least 6 mo's of interest, but you shouldn't have an open balance after the refi.With cash, you'll get back your investment and won't have the carrying costs you had w/the HELOC. 

Since the rental can (& usually does) sit vacant longer in the winter, this gives the most protection to the owner while carrying it vacant in the winter.

I'm new here, but I grew up with a dad who was a real estate broker and funded his retirement with his buy and hold and then carry the contract when sold strategy.