Struggle to cash flow, buy it anyways?

[Kayla Davis]

I think I know what the knee jerk reaction is going to be here: Absolutely not!  Hear me out...

The goal: Purchase a multifamily property as my first ever purchase with 3-4 units on an FHA loan with as little down as possible, make it cash flow and build the equity, baby. Escape the PMI within a few years with a refinance.

Problem is, I currently live in Arvada and I'm looking at the suburbs surrounding the west side of Denver, and a lot of multifamily properties are pushing a quarter to a half a million. I haven't found any that meet the 50% rule, and only handful that would eventually meet the 1% rule after updating and improving, but wouldn't cash flow for the first year or two while those improvements are being made. I could live rent free while breaking even for a while, but nothing in my pocket right away.

However, a lot of advice I've read around here on Bigger Pockets and around on other blogs and forums say that the real key to success and avoiding mistakes is to only invest in deals where the numbers meet the rules. I feel like there are very few properties in my area where the numbers are up to snuff, and those that do meet standards require somewhat tremendous rehab. 

So what's the professional opinion - should I buy a 'plex even if it doesn't currently cash flow? Should I count living without rent a cash flow? Or am I just being to cautious about risk?