Basis is what you paid for capex.

I hear you! 

@Victor Yang To use the rental losses to offset any active income (W2), you'd have meet Real Estate Professional status (which would be difficult to do with a W2 job because you'd have to work more on real estate than any other job to qualify) OR have an AGI of $150K or less.

Personally, I bought a 3 bed single family home soon after starting my job and had two friends from college rent which covered my mortgage plus a little extra.

Which i've started to message some with out any luck so far.  

Can you reach out to their owners and see what they’re doing?

Unless this is some type of homerun deal, which I assume it isn't if the mortgage is upside down, then why bother?

Additionally, your brother would inherit your cost basis in the property, which could result in significant capital gains tax if he sells the property later.

How did you find this deal and how did you negotiate it?

I'm not following you, can you explain in more detail?