Is This a Deal...or Speculating?

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Hi BP,

I'm on the hunt for a house hack in Philly, and seeking some advice for a duplex  (3/1, 1/1) on the market. I need a gut check -- in this competitive market, where can one take some liberties to buy in the path of progress, live and wait. And where is such a strategy just "pie in the sky" thinking, and too risky of an endeavor when asking price is doesn't meet the 1% rule? 

To clarify, my thinking would be to live in the 1/1 for a year or two while the neighborhood continues to improve and gradually increase rent. And while monthly cashflow is -$495, if I add that to market rent for the 1/1 ($950) then my girlfriend and I would only be paying $125 more than what we are currently paying to a landlord every month ($1,200) while building equity in a home in a neighborhood where prices are only increasing. 

Am I being TOO optimistic? Or are these compromises necessary evils in hot metro areas?

The Numbers:

Thanks,

Jesse Fields