The ones that are can clearly stomach the losses if that happens.

By splitting out the rental, voila, now you have rental losses which are automatically aggregated with all your other rental activities and are non-passive, even if you don't materially participate on it's own. 

It is obviously better to have $1 in passive losses to offset taxable income today vs $1 in losses 25 years from now.If I have a $1 million dollar short term vacation rental , using cost seg I will be able to deduct 35% ( example number, not exact) or $350k this year.

But, with a little planning and thought and education you can help prevent a total unexpected loss, or minimize it.

Foreclosure usually happens because of death, illness, job loss or divorce and cripples the homeowner's ability to make mortgage payments.

First of all, sorry for your loss. 

My tax returns (new llc) doesn’t “show” a lot of profit- a lot of losses on paper. 

One bit of advice is scaling too fast if the market changes and factors out of your control (interest rates, job cuts, rent decline, job loss) have enough in reserves to weather those storms.

The concern he had and to be fair he said he needed to research it (i am just doing some of my own) was that since most of the work and hours will be conducted in LLC now and the LLC does not own the property would that create any issues with my ability to file a schedule C and claim depreciation and losses, etc?  

I’ve just accepted it over the years and come to the conclusion that the nominal amount I spend on legitimate business meals is ok to take as a loss.