We minimize/mitigate that risk by vetting the borrower and the contract language. 

Pitching the Subto scenario and related deal structure/terms would be an integral part of your marketing to find the end buyer. 

I pitched it to my fellow investors, but numbers did not work for them and we did not want to purchase the house ourselves, our initial plan was an assignment.As time passed we decided this house needed to be listed on the MLS to get a retail buyer.  

You ideally want a paper loss to minimize taxes and potentially even take it further and apply the loss against other income you have as Bill mentioned in the comment. 

@Andre Nusta, Devekio a pitch about what skills you have that may be good for a co-host and begin calling airbnb owners and asking.

I think willing to pay for more modern updates/construction so that out of state maintenance is minimal.

But that assumes you have minimal equity within a LLC and you’ve operated the entity in a fashion that cannot be pierced.

I do not want spend my W2 income to cover house mortgages, to not have pressure if things like layoffs will happen, so my plan is to buy house in a good neighborhood that may have appreciation and some minimal cash flow after all expenses (management, maintenance and vacation).

Make sure to spread out your investments in various asset types to minimize risk and secure financial security in the long run.

Practice your elevator pitch before hand.