What alternatives would you recommend?

As for writing it off on active income, you’d still need to qualify as a REP (or spouse) or have material participation.  

I would check and see if this is something your bank offers, or alternatively a lot of PM software has the ability to do it for a small fee too. 

As an alternative, I am requesting contractors to sign hold harmless and release of liability agreements.

The huge bonus of this property was it was coming with all existing materials inside including, condensers, lumber, electrical wiring, as well as pex and PVC for the plumbing.

I know you need 750 material hours per year (As well as over 50% of hours in real estate business).

Not saying it cant be done or you shouldnt, just dont bank on it being a cheaper alternative. 

Alternatively, set aside one or two boxes of things that family might want that you can offer for anyone to go through....believe me, it will save you some grief in the long term with your family.  

Alternatively, you could use other assets as collateral

As an alternative, I am requesting contractors to sign hold harmless and release of liability agreements.