Is a negative cash flow house hack in the DMV a bad idea?

[Brian Kim]

I graduated college over a year ago and would like to live in Arlington specifically Ballston, VA Square, or Clarendon for it's nightlife, metro access, and vibrancy. I'm interested in house hacking to build equity while having a place to stay. My primary concern is the properties are significantly cash flow negative. From what I read, this is pretty typical of the entire DMV area and a lot is appreciation plays. My question is how much if any negative cash flow is too much.

For example, a few 3b3b townhouses in Ballston are around 800k. With current interest rates, a 20% down payment is around $4500 monthly. Rents for look to be around 1100-1300 per private room. Taking the best possible case of the other two rooms being filled for $1300, I would be paying the rest at $1925 a month. I need a place to live as well so let's consider my cash flow is a negative $625 per month not even including capex, vacancies, and other expenses.

I understand that if I tried farther out, I could find places in the 400-600k range that could cash flow better but I really don't want to live in the suburbs when I'm in my early twenties. If there has to be a sacrifice made, I'm willing to give up a better investment than where I have to live. At the same time, I don't want to make a terrible house purchase that will financially doom me when I could have rented.

I'm looking to build equity and wealth long term. I'm lucky that I landed a great job where a $600 monthly loss or a big repair won't affect my finances. Considering my circumstances, is buying a townhouse at this price point an unwise decision?