Taking a small loss to save on taxes?

[Victor Yang]

Hello all,

I am looking to buy an apartment building. Right now, the best offers around me are for some 1.3-4 million, that only generated around 100k per year gross, so there would be a high chance of not cash flowing, and paying money, especially with a commercial loan (these buildings have more than 4 units).

I was thinking that although the rental itself does not generate money, I would be able to deduct the mortgage interest, and depreciation from my personal w2 income and would be net positive. I am in one of the higher tax brackets and could be saving around 40k~ a year on taxes with this. Mean while i would be building equity, and if rates do lower, or when the term ends, could refi for better rates and then maybe cash flow.

My questions are:

Is this too naively optimistic?

Obviously there are risks if I get laid off and would loose all the tax savings and be paying out of pocket for the property, but are there other things that I should consider?

Thanks all