I carry a mortgage on my other home that is valued at about $480K with a 300K loan @ 2.25%.

This is true with how you structure your deal: pref, carry, fees and waterfall, projected return thresholds, hold periods, etc.Reputable sources: there are many mastermind groups out there.  

I only buy off-market now.Here are just a few: properties with title issues, court settlement claims, master leasing, lien & mortgage acquisition, seller carry back, options as well as traditional buy & holds, flips.

Selling @ $500kLender providing $490kCan the remaining $10k be carried by seller?

I have a large amount of passive activity losses on my tax returns which will carry forward (not REPS so can't offset my W2 income) I don't know anyone who retired early/quit W2 at the age of 40 from their stock portfolio.

Since you said the owner needs the income rather than the lump sum, buy the properties and structure an owner carry note that secures their income stream for 15-30 years.

At age ten, I walked half a mile twice a day to fill a 5-gallon water jug and carry it back home because we didn't have running water.

We invest in notes but prefer first over seconds because seconds typically carry much higher risk - for example a jr lien could be 100% wiped out in a bankruptcy whereas not happening with a firstPros and cons to all - if you at buying at auction with liens still attached most lenders will want the full payoff or foreclose

First, there a number of investment thesis' carried out by syndicators with unexpected headwinds, not solely betting on rates.  

Excess business losses are capped for single individuals at $250,000 and for married individuals at $500,000, with any surplus being suspended and carried forward.