I am brand new to the real estate investing world and discovered this amazing community when I figured out I was wasting my full potential with my 9-5 w2 and knew I wanted more!

You may think of it as paper loss, but this term is not helpful for taxes.Such a loss is considered "passive" and can always offset passive income, and passive income only.As you discovered, you cannot apply this passive loss against your NONpassive income unless your income is relatively low or you qualify for one of the exceptions.So your options are:A.

@Dylan Curtis Underwood, the not so secret fact of the matter is: new construction has issues too.I grew up in a house built in the 1890s.  

To be perfectly honest the worst kept secret in Real Estate is that Property Management is the red headed step child of the industry.

I have funded i bet no less than 200 deals in the last 10 year that were from Aussies selling their home that is now a full reno.. many of them in their superannuation funds. ( US version of IRA )  just the dirty little secrets most wont talk about.

I've found many deals by peeling a few layers back to discover the market rent is higher and/or the purchase includes other tangible things outside of just rental cashflow (i.e. instant equity).

I discovered a guideline that prevents lenders to loan to Condos that have master homeowner's deductible > 5%. 

Many times I discover the highest and best use doesn't align with my investment strategy or doesn't make sense from a profit perspective given what the seller is asking. 

If you have a hole this big, you probably have a dozen more you haven't even discovered yet.

When I went to get a loan to finish rehabbing the property this was discovered as they pulled title and wanted to get insurance in place.