Passive Activity Loss RulesIf you are a real estate investor that doesn’t qualify for REPS status (discussed in #5 below), understanding the Passive Activity Loss rules is crucial.

We love wine and food- the place is just taking off and hope to build a few cabins and a home for us.

BUT this applies to experienced builders who have a strong track record of successful projects without trailing loss history.  

I ask because it seems like you have two clear choices - Either finish the rehab and sell potentially at a loss, or hold the property while renting it out so you can hopefully benefit from gradual appreciation and using the rent to help make any principle paydowns on any loans you may have. 

The appreciation is probably worth more than the cash flow loss, which I am okay with at this point, but it does hurt to see it bleed.

I'm mainly trying to just figure out if the year 1-5 loss of around $38,000 is still worth it in the long run with the sale price covering that loss plus about $250,000.

I have them all replaced. 2. curtains/drapes are stained with food and whatever red, purple color. 3.

Real estate/passive investments are already preferential when it comes to taxes since they usually show a loss on paper and the income is not subject to SE tax.  

If it's not transportation, housing, or food, don't spend a dime on it. 

@Jay HinrichsReminds me of the cereal companies creating the nutrition / food pyramid.Of course they are gonna have an opinionated pieceI agree in vacation / beach areas they are great but once you start getting into true residential neighborhoods I can see them being very problematic