If I only had a few thousand I would continue to save up until I was able to house hack with a FHA Mortgage.

Your cash on cash return comes out to almost a negative 1%.

Not trying to be negative nancy but I will not sugar coat anything.

If I change the policy to cover actual costs, policy will cost the triple or $5,000/ year more, which makes the investment have negative cashflow. 

Don't forget to include a vacancy rate (I like to use between 3-5%) and a maintenance reserve to cover things like paint, appliance repairs, etc.If the property pays for all of your expenses to hold and doesn't run you negative, it's never a bad property to look at analyzing further and how other areas compare.Purchasing properties where it is negative cashflow forces you to hope for appreciation in order to make any decent returns.

I only did a couple of fire damage estimates, but I think you're looking at $150 SF or so depending on finish parameters.

This negates the need to cash-out refi to get your money back out, because you didn't have to put a bunch of money down to begin with.

For some reason, in one part it says I'm getting over $1.5k cash flow, but for the year, I'm in the negative.

You are right, this is proposed legislation and our industry is actively fighting against the sections that would most negatively affect self-directed retirement account investing.

Negative income (ie loss) means no taxes on your schedule e for that property.