How bad is it to start off not cash flowing on 1st rental that is new construction?

[Brian Quo]

So I live in the SF East Bay and have been looking to invest in a rental.  I am too afraid to do out of state rentals.  I have been looking at some homes for investment and it's expensive here.

I have been looking at Tracy, Manteca, Lathrop area to get an investment.  I do like some new construction homes in the Manteca area and can put about 20% down.  However doing the calculations after rent, property tax, Mello roos, property mgmt I would be at a loss of about $900 to $1000 per month after rent. 

I know in the Bay area and California it's hard to cash flow. What I am hoping for is appreciation and also being able to refinance at a lower rate in the future where I would be able to be cash flow positive. The new construction keeps coming out with new price sheets every week and the properties seem to keep going up but some of the properties do have special rates (APR or incentives). I kind of feel I need to get in before I can't afford it because the price is going higher.

How bad is it to start out not cash flowing?