A 2-block difference could be the difference between appreciation and loss.

Do you expect a loss?

That was assuming you qualify to take the entire loss in 2023. 

If I assume NO property value change, in 30 years, the WH property will have turned $383K (down payment plus $800 monthly negative loss of running the property) into $459K.

So if we underperform the pro forma and we end up losing up to $100k on the deal, he would share in that $50k loss and I would eat $50k of the loss.Is that what you mean?

Hope things improve moving forward for you and in the grand scheme of things, $2600 loss I would just chalk up to a lessons learned and one you can continue to teach others about in the future.

Or should we accept the potential loss on the second room if it remains unrented?

I have some rentals and have more depreciation than what they rent for so if I was able to classify the new construction as passive income, I could then use the "losses" from my other passive investments to help offset the income.

If the builder miscalculated or overlooked on certain items, now they are making very little/nothing/lose money, either they will honor their word and still finish the house for you at a loss, or they just stop showing up to your job.

Should get appraised this week but trying to figure out how much they’re going to list and if they’re mostly trying to recover loss from the foreclosure