Hopefully the security deposit is enough to minimize your loss.

The most likely scenario is that his renters will eventually do something that costs him a significant loss, despite cutting them a major break for so long. 

@Kwok Wong With limited exceptions its customarily the lower tier neighborhoods that present both BRRRR and cash flow.

If there are no boarding house limitation to the number of unrelated persons, does this structuring matter?  

I will keep showing our worth, it will definitely be a step up for them regardless of the loss of reviews.

.- Rental loss - PadSplit claims they collect 97% of rents, but I've spoken to a few hosts who have said that a much larger % of their tenants get kicked out owing $500 or more in back rent that is rarely ever collected - what's your experience been here?

Good to hear... i'm factoring in an 8% vacancy rate in my per forma, hopefully will accommodate any loss expected .

Normally, they negotiate with the company and advise you on the loss. 

My best guess would be you had carryover losses but consider the opportunity cost of burning them up. 

If the lender does not permit this, your attorney and CPA will have limited options.