House Hacking in Chicago

[Reed Meyer]

I am a new investor just graduating college and moving to Chicago in July. My plan is to save up this year and then purchase a property for a house-hack during the summer of 2021

I am rooming with 2 of my friends. However, just one of them wants to get involved in a house hack. So we will be looking for a 2 or 3-flat where we can live in a 3-room unit. 

As I look in areas north of downtown (Avondale, Irving Park, Albany Park, Jefferson Park, Bucktown, Wicker Park, Lincoln Park, Lakeview, Wrigleyville, etc) I am finding that the numbers have not even come close to working. The monthly rent that we would get from the other unit(s) plus our one roommate always comes out to around $1,000 less than our monthly mortgage + expenses + mortgage insurance (mortgage insurance because we would be using a 3.5% FHA loan). And those are the best scenarios we've found. I am starting to think that there is no chance we find a property that offers positive cash flow for us but I would love to find something that results in closer to negative $200-$400 in cash flow per month. This would allow my friend and I to pay $100-$200 in "rent" versus the $800-$1000 we expect to pay this year while saving up. This rent improvement would make us feel that we have successfully house-hacked. Does anyone have any suggestions as to how we can change our approach to find a property that might make these numbers work better? Am I missing something when analyzing these numbers?

Our max down-payment would be $50k and in that scenario we would have no reserves.