It’s got great bones and potential but I’m just at a loss as to how to move forward. 

Excess business losses are capped for single individuals at $250,000 and for married individuals at $500,000, with any surplus being suspended and carried forward.

For this year, I currently have about $131k in short-term capital losses outside of real estate. 

There may be some quick periods of no cash flow, but that should be made up at the end of the rehab... meaning make up for the loss of cash flow used for the rehab + regular cash flow, not back to neutral cash flow.

Therefore, my monthly payment has now gone up by $1,000 which doesn't make sense to rent out anymore, as it will be at a significant cash flow loss.

However, I accumulate a good amount of passive activity losses from rental properties. 

Such short term rental  will follow these criteria(see numbered list below), in order to take advantage of (1) qualifying to fill out schedule E, thus avoiding the Self-Employment tax should there be any profits. and (2) being able to offset your W2 income should there be a paper loss. 

Profit/Loss Statement and Balance Sheet for the Property: At a minimum, we would want a profit/loss statement and a balance sheet for the most recent complete year as well as year-to-date for the property, but we would prefer to also get the last 2 years of tax return pages for the property.

There are appraisal fees, inspection fees and other fees involved on your end when you buy a property.When a seller has a need to sell quickly (job loss, job transfer, medical reason, marriage, divorce, probate) they sometimes will take speed and no hassle over list on the MLS.

To locate the best short-term rental (STR) insurance for your Asheville property, consider must-have coverages such as dwelling, liability, loss of use, and additional living expenses.