Since real estate for you will be treated as a passive investment, you won't be able to offset your personal income with losses.

@Femi Ibrahim so sorry about you losses.

However, there's obviously no guarantee in what they'll find... so - how do folks mitigate the risk of the 2k-5k loss when looking to purchase a new property for a plan like this?

If this is an accepted practice in North Carolina then something is definitely off.It seems like an awfully underhanded way to finance a potential vacancy loss using the outgoing tenant.

I am positioned to begin investing in real estate with all-cash deals but am just trying to learn as much as I can and meticulously plan my strategy so there are no gray areas where I would sacrifice opportunity or create unnecessary risk.What threw me off on refinancing was just my misunderstanding of the terminology.

If there is no solution other than "you take the risk", it seems this would be a death-toll to selling houses at auctions absent a huge bucket of cash to cover losses if they happen.  

Absorption rates of competitive office space may not immediately reflect quarterly total job gains or losses, but it is prudent to consider longer-term economic and demographic performance as influential upon current occupancy levels.

I am getting a really sneaky suspicion that they are stealing money and finding ways to charge unnecessary fees and want honest feedback from anyone who has recently dealt with them.

And, if the money is borrowed and you lie on your loan application about that (they will explicitly ask and you will have to explicitly lie if you want the loan) then you're committing loan fraud.If you have to turn right around and sell this property for some reason, I,as the lender of the 20% down, will suffer a 50% loss. 

We called lawyers but they said the company was so big that they were highly invested in top lawyers that would drag it out for so long the recovery would be a loss.