We had a tenant who decided unilaterally to move out two weeks later than the contractual end date. Consequently, the house could not be made ready for the new tenants and after a big scramble, we managed to save the ...

This was a great answer by @Lateefah MathewsIf your seller has a Profit&Loss from the prior year, that may be helpful but not necessary.Welcome to the forums @Shell Peterson !

I typically find a new tenant before they leave, or shortly after their leave, which prevents me from any losses and puts more money in my pocket.

I ended up owning about 250 of these.. and having to sell them off taking loss's virtually everyone of them it was a blood bath for us HML in 08 to 2010.. and not anything I want to ever repeat.. those that started lending HM post 2011 have had the rising tide great market situation but even with the good market people fail all the time for various reasons. 

I pre negotiated rolling any inventory that I could not sell or would have to take a loss on to 5 year term and rent them..

On the other hand, a 24-year history with an 18% net IRR that includes some losses may indicate a more seasoned sponsor who has navigated multiple market cycles and learned valuable lessons along the way.Regarding internally managed operations, like property management (PM) and construction management, scale plays a crucial role.

@Tommy BrantIt really depends upon the market, and I think the operator, their scale of operations, and their loss runs.We bought a deal from a mom and pop last year, and their insurance company saved us dramatically on pricing.  

I would suggest this going forward, getting a PM, like someone else mentioned.I hope you find a resolution to this but as previous comments have mentioned settling sounds like less of a financial loss than to pay an attorney and going forth with legal action.

What Zach is saying here is that you won't be able to utilize the "STR Loophole" which refers to using any net loss from the STR business to offset any income from other sources like W2 income or 1099 business income.

W-2 income, but it’s subject to passive activity loss limitations.