Any investors in DC?

[Shannon Bullock]

My brother is selling his 1 BD / 1 BA condo in DuPont circle to move out of the city. He has given me the option to purchase it. He only owes about $330k on the existing mortgage and is planning to sell at $435k. Unfortunately I would need to purchase through traditional financing  with 20% down since he needs the proceeds from the sale to buy a new place rather than taking over his current mortgage. I’ve heard many people say that DC is a hot market and should have good appreciation, but based on my calculations this condo would have negative cash flow of about $500/month. At first blush it seems like I should pass, but am I missing something? Should I consider factors other than cash flow? My strategy is to buy and hold but it still seems like a bad deal with such negative cash flow. Any thoughts?