This was not like taking out a regular mortgage, There were all sorts of hoops to jump through and tons of extra paperwork to fill out but my Realtor and Lender made the process easy!

Of the 50 units, I'd imagine only 10-15% might actually have cars that get towed regularly while the other 85-90% don't.  

These deductions were crucial in offsetting the property owner's taxable income, effectively reducing their tax liability.

I believe in practice it does not actually offset the capital gains but reduces my taxable income dollar for dollar with the loss, as long as my Modified Adjusted Gross Income (MAGI) is under $150K.

I’m also curious if it's possible to convert these units into regular apartments, as this property is located in the NY suburbs.

We took over the management and built relationships with the various agencies and have been leasing the units more regularly with 2 vacancies remaining.

Any reduction in debt or cash received might be treated as "taxable boot," potentially resulting in tax liabilities.

As for aggregate losses: Yes, any losses above your W2 income that result from the cost segregation study can be carried forward to future tax years if they exceed your current year’s taxable income.

You need someone with boots on the ground to drive by the property regularly, inspect every 3-6 months, supervise maintenance, etc.

Evictions/move-outs that regularly included half a tenant's torn-up furniture, personal items, and damage to units that would take weeks to clean out and a state requirement to store tenant belongings for 30 days after move-out, even in the case of evictions.