I think sometimes it's important to consider the whole picture outside of just cash flow. Cash flow is important and I certainly factor it in however there is more to my decision making criteria than just that. Cash flow is the tip of the ice berg but there is still more underwater that you have to uncover.
Personally, I wouldn't do a buy and hold deal that cash flows -1000k a month. However I would try and find opportunities to improve that. Is there a hospital around the area that lets you offer it as a mid term rental? Any opportunity for STR? Any opportunity for value add that you can use to force appreciation and sell some day? If the answer is no to those things, then I would definitely not do it. If the answer is yes, then I'd recalculate my numbers and decide accordingly.
Consider other factors that real estate benefits you: appreciation, principle paydown, depreciation, other tax benefits, etc. If appreciation is 4% a year (assuming), then convert that into a dollar amount and add it to your equation because it's "hidden income" that you won't be access until you sell or refi. Same thing with principle paydown. Consider depreciation. If you are REPs status, imagine the tax benefits this gives you.
I am considering a duplex that cash flows -100/200 a month but I could use it to lower my taxable income by a significant amount. When I consider all the other benefits, it is worth looking into based on my criteria. Yes, putting money into a property isn't ideal because technically it can't run itself, however I would happily choose to put $100 less into my 401k and instead into a tangible asset that I have complete control over.
Hope this helps.
