At first, you won't be able to offset your W2 income with losses, but it is nice when you sell a property at a profit and all the capital gains are wiped out by losses from other properties.A huge amount of tax savings get unlocked if one of you leaves your W2 job to focus on real estate and you get Real Estate Professional Status (REPS). 

It's all about balancing immediate profit versus long-term wealth-building potential.  

It's OK but super skinny and a lot of work doing a rehab loan for $23k profit if everything goes perfect.

That's fine, i mean the profit and losses I've seen are pretty legit breakdowns.

But keep on thinking and evaluating, as there are niches out there where someone can develop a profitable business over time.Good luck  

And we add the cost of the W/D into the rent, so any units that make it a little more than 1.5 years are profit.

Generally, Distributions are paid from profits that have already been taxed at the personal-level since IRS Schedule K-1 flows through to personal return.

The $12,000 profit from Rentals 1 and 2 would be offset by the $15,000 loss from Rental 3.Hence, the $3,000 loss cannot be deducted against your other income because your AGI exceeds $150,000.

Will landlords who are barely profitable as it is sell?

Changes some of my answer below, but here would be most of the types of transactions you would have in these accounts and between them.Property transactions would be: all property specific rents and expenses, allocated expense transfer to the master LLC and transfers to master LLC bank account for profit AND/OR property management fee.Master LLC transactions would be: Shared expenses going out, reimbursements/transfers from properties for their allocated share of those expenses coming in, the transfers from your properties deemed as profit AND/OR property management fee and then transfers to your personal accounts deemed as owner distributions.Other transfers that could occur is if the master LLC needs to transfer to the properties for capital expenditures above and beyond the reserves you might leave in their accounts.