Property has negative cash flow, but.....

[Klyde Waggsdale]

I am looking at a property that has a negative cash flow, but the tax savings through deducting my losses and depreciation more than make up for the negative cash flow. The property is also being sold at a deep discount. My strategy is to buy and hold for 5 years, let my tax savings make up for the negative cash flow, and then sell the house at 10% higher than what I paid for it. The majority of my return will come from the sale proceeds being that I will buy the house at a discount.
I look forward to all the comments from our community. If you see any problems with my logic please let me know. Thanks for the help. This forum has been great!