Seattle REI Newbie

[Randy Webb]

Hi all, I've been lurking on the forums here for a few months and have a question about cash flow.

I want to buy a 2-4 unit near downtown Seattle and owner-occupy one of the units. My plan is to use a 3.5% down FHA loan to do this. However, the market here appears to be such that I won't be able to get anything in my target area to cash flow (Capitol Hill-ish, for you locals). Monthly rents are about .5% of the asking prices around here.

Would it make any sense to get into a deal that is cash-flow negative even in the best case scenario? I suppose my goal in doing so would be to build equity rather than for income. Rents are skyrocketing in my area and I'm really just trying to have a net housing cost that is less than what I would be paying for a similar quality rental. As long as the negative cash flow is within that range I feel like I can justify this.

Does this make sense? Or am I thinking about this the totally wrong way? Thanks in advance for any help.