How best to use FHA/VA financing in high-cost markets?

[John Fabros]

Sorry if this is the wrong forum for this.

I recently moved to DC from Jacksonville, FL where I made a good start in picking up cash flow properties. Here in DC, I'd love to take advantage of the larger amount of leverage available but I'm just not seeing very much cash flow potential (4-unit properties too expensive or fail FHA self-sufficiency test, few three-unit, even fewer true duplexes, house+accesory dwelling too expensive). I have almost no experience/knowledge on flips/203k (would owner-occupy at least a year) and almost all single-unit properties in the city with appreciation potential I could afford are condos.

I will admit that I've focused almost exclusively on DC, but it seems that 2-4 unit properties are exceedingly rare elsewhere.

Do I need to shift my expectations (near neutral cashflow multi-unit) and perhaps accept just getting a cheaper single-unit outside the city?