What to do about mortgage rates negatively impacting cash flow?

[Christopher Dru]

I'm a beginner real estate investor doing all the learning, reading, and mock deal analyses that I can before I'm able to locate a cash flowing duplex in my target market and purchase my first property (I plan to live in one unit and rent the other).

As I scan the MLS and analyze potential deals based on current market prices and expenses, it seems that the major factor preventing nearly every property I analyze from cash flowing is the mortgage rate.

I plan on putting down 20% into my aspirational duplex and having around 10% or so above the down payment in cash reserves for unknown expenses, maintenance, emergencies, etc.

With mortgage rates being as high as they are (7%+) at the moment, it seems like a true "needle in the haystack" situation to find a property that will cash flow in my area (Central Florida).

Note that in my analyses, I am running the numbers as if I am renting both units of the duplex as well as if I were to rent only one unit of the duplex (both situations produce negative cash flow).

Let's say I find a duplex that I want to purchase and everything fits my standards with the exception that I have negative cash flow of $100-$200 per month. At that point, am I basically making an appreciation play? Would the best move be to hope rates come down in the near future so I can refinance to a lower rate? In this situation I'd need enough cash reserved to keep the property operating at a negative cash flow for the indefinite future.

What are investors to do in situations like this when there just are not any positively cash flowing properties if you're not purchasing the property outright? Standby until the cost of capital goes down or get creative with private lending?

Thanks for any and all insight.

Chris