Underwriting a first multi-family house-hack in a high-priced market

[James96]

I'm looking to purchase my first investment property within the next year, focusing on a multi-family unit to house-hack, but I'm overwhelmed by the analysis needed to identify a truly profitable deal in my current high-priced market. I understand the basic metrics like cap rate and cash-on-cash return, but I'm unsure how to accurately project renovation costs, account for potential vacancy rates, and factor in rising property taxes or insurance premiums. For experienced investors, what specific, actionable steps did you take when underwriting a property to avoid optimistic projections? How do you balance the appeal of appreciation in a hot market with the fundamentals of positive cash flow, and what were the most costly beginner mistakes you made that I should be vigilant about?