The capital loss eats your gain, there is no limitation. 

My wife and I are very fiscally conservative by nature so our nest egg is more than strong enough to cover an extended shortfall, but I agree that balancing the risk via our leverage is a good strategy. 

I had more than on contractor borrower of mine that finally figured that out got enough equity from relatives and now they are doing quite well and no way we can compete with them.but you start moving up north of 750k to purchase and unless your in the Bay area or prime LA  that does knock out a lot of competitionand you also have to remember this poster is paying CASH  HUGE difference as she has no cost of capital most of us need to borrow and if your borrowing HM which 95% have to as banks really don't service this niche ... her carrying cost ona say 700k project would eat up 20 to 30k EASY.. 

But as soon as you start to consider capex on a 10 or 20 year scale you will find that it will more than eat up the cash flow.

The domino effect will eat your equity as well as life savings.Unload the properties while you think it is the peak price. 

Get more income, stop going out to eat, get a Roomate and do whatever you have to do to GRIND down these balances on your credit cards.

Then you will most definitely eat up your savings.

Why on earth would you sell a golden goose when it’s laying gold eggs for you in the forms of appreciation and rental income ?

If you're financing through HML, the interest costs alone will eat you up.

This is like allowing your dog to eat off the table at dinner it teaches the dog that it’s okay to do bad behaviors in the future .