How does live-in flipping affect cash-on-cash calculations?

[Patricia Miller]

As an exercise, and to practice running the numbers, I decided to evaluate the investment potential of the house I currently live in and treat it like a live-in flip. (It was purchased new 3 years ago and we have been doing a ton of work to finish it inside and out.) Knowing that I probably didn't include some of the costs that should be included in cash-on-cash returns analysis, I was shocked to find that we were at -14%. Then, it occurred to me that it might not be necessary/appropriate to include such costs as mortgage, utilities, etc. because, after all, we have to live somewhere. If, on the other hand, this house was purchased solely for flipping while we lived in another house - none of the expenses of our residence would be considered in these calculations, right? Of course, the incentive in flipping, normally, is to do it as quickly as possible to minimize costs associated with mortgage, utilities, upkeep while it is being flipped. In our current situation, we have been in this house for an "extended" flip you could say. (It was never intended as a flip in the first

So the question is - is it appropriate to omit certain cash outflows with a live-in flip if the property is the sole residence?

Thanks.