Many people are suggesting to do a 1031 but have no idea what your gain / tax is(if any).Co-ops in the tri-state area 'normally' don't appreciate a crazy amount.The main reasons is the high monthly maintenance costs, over-leverage of the board, potential difficulty of buyers getting a mortgage and the approval process of the buyer.With that said, talk to your CPA to discuss what your gain / tax would be before thinking about a 1031 exchange.If your tax burden is low, don't bother with the 1031It may be possible that you have suspended passive losses to cover your tax burden.best of luck.

However, it may make it harder to fill the common equity piece as the more preferred equity there is, the less desirable the common equity becomes because of risk of loss.

Meanwhile, my investors that bought a property from a REIT had a 60% paper loss from just purchasing the property. 

If rents do not increase above $1900 that a loss if they do increase it seems it might be a low NOI.  

You would not be able to exclude it from your DTI until you filed with it on taxes (assuming you did so and did not report a loss). 

Equity investments can suffer a 100% loss—the FDIC doesn’t want to pay this claim.2.

I'm looking to offset rental income.I can't take a passive loss against my W2 income.

My CPA had some very simple questions about how to handle passive losses and RLS refused to weigh in on the situation whatsoever.

You can continue to invest in real estate and create more depreciation losses via cost segregation to offset the recapture though. 

Active = Income earned from Material Participation.Whether that's SMB, W-2, contract income, or prof real estate.This is income where ordinary tax is paid and losses offset other income.