Buying a Negative Cash Flow Duplex vs. SFR

[Luke Preslar]

Greetings BP!

I have a somewhat important question to ask all you savvy investors out there. 

Situation: I am an active duty military member who will be PCSing to Cheyenne, WY; however, due to personal reasons I will be moving to Fort Collins, CO (or any area near there). With this in mind, my wife (also active duty) and I have begun looking into the Fort Collins real estate market. On average, I would say that real estate in Fort Collins has appreciated rapidly, leading to somewhat overpriced properties. I have been looking for quite a while for a multiplex that would cash flow positively, using a VA loan as financing; however, I have not been able to find this. As a result, I have also started looking into buying a single family home; however, these properties will most likely not cash flow positively either after we move to our next base. 

Question: Considering the difficulty finding a positive cash flowing property, would it be better for me to buy a decently priced house or a duplex to decrease the effect on my real estate investing?

My Idea:  

- Reason for buying a negative cash flowing duplex: Even though the property wouldn't be cash flowing positively, 1) I could still rent out the other side and have some of the mortgage paid for by a tenant and then rent out the other half when we move, 2) I could do renovations to try and increase rent (however, i still don't believe this will allow me to gain anything great in the cash flowing side since market rent rates really decide the rent prices), and 3) since the market is still going up, I could hope for appreciation and sell it when we move/ or maybe refinance (I don't like speculating though so the situation sucks in general) 

- Reason for buying a negative cash flowing SFR: I wouldn't be able to make rental income with this option until we moved after 4 years; however, this option offers 1) a higher chance for appreciation since the comps on average in Fort Collins have continued to increase at a decently rapid pace (I would use this appreciation and refi the deal, buying a cash flowing property in the future), and 2) I could do renovations to try and increase rent when we move; however this leads to the same problem as the duplex with market rent rates.

In the end, I am a very motivated and hopeful real estate investor. I know this situation is not a good idea but sometimes we have to pay the price for living where we want to live; therefore, i'm trying to figure out the best way to make my family happy but also not hurt my future real estate investing opportunities. Some advice would be greatly appreciated on this!!!!! 

Side note: As active duty military, our pay is very stable so i'm not extremely worried financially about this situation; however, that does not mean I willing want to buy a crappy cash flowing property. Also, we are looking to retire in Colorado eventually after we finish the military life, so maybe its worth buying in the state even though its overpriced right now?