Be prepared to explain your issues and why it did not work out.  

Yes, this goes well beyond the cost of a security deposit, and it's far from being "normal wear and tear", but things get squirrelly if you have to go to court, so prepare for that eventuality!

My tax preparer says there is no way for her to not apply the $25k passive loss deduction.

You may want to consider working with your accountant remotely to expand your options.I would also recommend looking for a tax strategist who is willing to work with you throughout the year, not just when preparing your tax return.

Prepare a compelling business strategy and show off the property's profitability.Seek out vendors who are willing to take on the property's finance.

However, TIC is a real way people can buy in these neighborhoods at 1/2 or 1/3 the normal entry priceAre any Lender open to working through the full strategy of investing with the remodeler and then being prepared to finance the individual home buyers as well?

We are preparing to do fix and flips long distance in a city where we have plenty of family.

As far as direct mail is concern,  you'll need to be prepared to be consistent and have a good budget for mailers. 

Honestly, it's not as big of a deal as people make it out to be as long as you're addressing mechanicals, or you're prepared to.

You may want to consider working with your accountant remotely to expand your options.I would also recommend looking for a tax strategist who is willing to work with you throughout the year, not just when preparing your tax return.