Multi Family | Am I missing something??

[Matt Stevi]

Hey guys, brand new to real estate, been learning for about the past 2 months. But here's my question:

Okay so this is a hypothetical situation. I'm just going to use easy numbers and make tons of assumptions, I just want to know if my thought process is correct.

Say you found a duplex, get an FHA loan, and you rent out 1 unit for $1000 and live in the other. Mortgage (and other expenses), we'll say, is $1500. So you run the numbers and because you're still having to fork over $500 every month to cover the mortgage payment (and expenses), the calculator says it's a bad deal, your cash on cash return is negative.

Fast forward a year and you move out as early as you can based on FHA rules. You rent out the other unit for $1000 and now your income is $2000/month, expenses are still $1500 and it's cash flowing $500/month, cash on cash return is positive (let's assume it's a good return, 10% or more).

To me, this would be a good deal because you got to live in a place for cheap ($500/month, which is cheap in my head), then you move out after a year and the place cash flows great. What am I missing? I'm aware that the goal of house hacking really is to live for free, but if I could live for $6,000 a year in a nice place, I'd do it. Around me, $6,000 gets you about 4 months of rent.

I don't know why, but I feel like I'm missing something. I've learned recently to analyze multifamily deals as if you were living in one unit and renting out the rest AS WELL AS if you're renting them all out, but this scenario that I've laid out sounds pretty good.

Curious to know your thoughts. Thank you!