House Hacking in an Expensive City

[Kyle Winston]

Hey everyone, I am new to the BP Forums, but have been listening to the pods for a while now. I'm 23 and live in Chicago and am want to buy a duplex/triplex/4-plex to live in and rent out the other units. I have been looking at a handful of potential deals and the majority of them barely cashflow or are negative if I include myself paying rent (in theory to cover the mortgage). In these scenarios I am assuming a loan of 3.5%-5% down as I do not have the capital for a larger down payment in the expensive Chicago market. I haven't seen many deals less that $600K for where I am looking and some of the deals are up to $1-$1.25M.  

Does it make sense to buy a deal where I am paying the same amount as I currently pay for my rental to help cover the mortgage and at least own the house? Or should I look for deals that make more sense return-wise in other smaller/less expensive markets? The way I see it is that renting a house is basically burning money. 

I am just starting out so I have a good grasp of underwriting and concepts but not a great baseline of what I should expect for returns, especially in a "House Hacking" scenario. Has anyone else had this issue?