That would certainly allow you to sell and do a 1031 exchange with just your interests.In your situation however, it sounds like you have each taken title to one of the properties. 

I’m thinking this could help us with tax deductions, especially if we operate at a loss.Does anyone have experience with a situation like this?

If you buy it for investment, you should do the proper due diligence to understand the situation of that property, how much is rent for?

Begin reaching out to lenders to see if you can qualify for a conventional mortgage, especially considering your change in financial situation (living in Phoenix, out of cash)

Most of them are also not very deep, leaving many situations unregulated.

What do you do differently in this situation?

I think Chris nailed it perfectly - you have to take your DD to another level and also be in a position, both financially and contractually, to take control of the situation if the borrower defaults.

Wholesaling is but one of many strategies and depending upon the property and situation, you would leverage one over the other.Best of luck in your investing.

I'd love to hear any advice on how other hosts in similar situations do this!  

Wherever you invest, you're likely to encounter a similar situation.