In addition to what others have said, Lakewood is a city where the majority of the single family home stock is older.

There are a lot of details left out that make it deadly to try that.I applaud the OP that it is clearly not his intention to say just anybody can learn this from what he has successfully done.

Take that money and buy RE in other growing markets, stocks, bonds, index funds, high yield savings, or probably a combination of it all. 

So 20 years before, when the tenant was 70, some guy bought it, expecting the tenant will drop dead soon, not such luck, sold it to the next guy who had it for 10 years, and  then he got tired of waiting as well.

We have an index fund/stock portfolio, dividend/simple interest income, real estate cash flow, and a low cost of living to get there.

This loss is designated as non-passive loss in Schedule E and hence deductible from ordinary income (W2, 1099B stock sale, etc).I see no state returns simply because of no income as well as the losses being non-passive and hence deductible from ordinary income.How is your CPA suggesting to track the passive losses without filing for state return?

Properties take longer to rent, rent stagnates or deflates, credit dries up, banks tighter on loan rules, credit cards decrease credit lines, your credit score drops because instead of 30% utilization you overnight go to 50-80-100% when they drop your credit line, hard money dries up for flips, stock market goes down and you don't want to take losses or can't use margin.   

i guess that depends on the size of the deal.As far as flipping goes,  how is flipping any different from buying a stock and selling it for profit?

probably, so your money locked up at 6.75% yield while if we get higher inflation causes mortgage rates to rise/cap rates to rise and stocks to rise even faster than RE. 

Sounds like you'd be shifting assets around from stocks, bonds, savings to real estate.