Seattle looks like a hard market for cash flow

[Pavel Bennett]

I work in the Seattle area (east side) and have been searching for a house that I could live in and also start renting out a room or two. This would allow me to put my rent money towards building equity and also would be a great learning experience. The problem is that I haven't been able to find anything worth looking at as the prices are too high for positive cash flow. The only way to make this work (possibly) is to bet on future appreciation, but I'm not interested in speculating.

I was thinking about looking for deals out of state, but it won't be a place I can live in, so I miss out on being able to tax-deduct interest payments on the primary residence and other such perks.

What do you guys think I should be looking into?