Calculating "income" when house-hacking

[Barbie Melendez]

I am a newbie who is seriously considering house-hacking or purchasing my first small multifamily property (Newburgh NY and Providence RI areas) or as a full rental for cash flow. Our CCC is -- Newburgh NY or Providence RI, 2-3 unit multifamily, in move-in ready conditions with just some cosmetic fixes needed, $250k or less, with at least 10% CoC return and $200 cash flow.

Following the guidance of Brandon Turner on "getting our reps in," my partner and I have been doing at least four analysis a day.  We are running into a question when calculating for house-hacking.  For example, we look at a 2 family home and plan on living in one of the units.  Only one unit would be generating rental income.  The second unit will be owner occupied.

Are we supposed to include the rent that the owner occupied apartment would be paying if we were not living in the unit?  My view is that since that apartment is not generating income and the rent, or out of pocket expenses, would be coming from our pockets ... then we shouldn't include that rent amount as possible income.  

When we don't include the owner occupied unit's potential rent amount, we get a negative cash flow.  When we include the amount of rent that the apartment would generate if we weren't living there, we get a positive cash flow.  I believe that including rent that isn't actually being paid by anyone is misleading in our calculations because it gives the impression that the property is cash flow positive while owner occupied and only one of the two units are paying rent.  The other expenses are the owner's responsibility and not being covered by anyone paying actual rent.

Should we be calculating rent from an owner occupied unit?