The facts that she was late twice and didn't even attempt to make a partial payment or talk to you says it all. 

You can write off everything still, its actually better if flip takes more then a year as you can make it look like a long term capital gain, need a investor friendly CPA who isn't afraid to do what gets you the lowest tax payments. 

Quote from @Bruce Schussler: A lot of Podcasts and Youtuber's say to cash-out refinance to keep rents balanced with payment; (PITI) then use those funds strategically to re-invest either in more real estate or just put into a high interest bearing account or money market account...Here's some of my thoughts and comparisons;Cash-out refinance with new loan so rents balance with payment:- The cash-out refinance is 100% tax free- The funds can be put into a money-market account off-setting a portion of the interest charge of loan- The loan balance gets eventually destroyed by inflation- The liquid cash eventually gets destroyed by inflation - The interest on the new loan can be deducted from the rent income- The refinance costs are 3-4% of the total- There is less equity in the property and LLC that can be attached in case of a lawsuit- The break-even on cash-out refinance with current interest costs on the new loan is around 12 years Vs.Paid-off property with positive cash flow:- The positive rent income is 100% taxable minus only depreciation and property tax- There is more equity in the property and LLC that can be attached with a lawsuit- The break even is not until after 12 years at today's interest rates- There is a rate risk in today's inflationary environment where interest rates on bonds keep rising*It appears to me that the cash-out refi is in the best interest for a property investor; (Dave Ramsey would strongly disagree!)

This is particularly effective when paired with bonus depreciation provisions.This method not only helps reduce your tax liability but also enhances cash flow, making it a powerful tool for real estate investors looking to grow their portfolios.3.

Many sellers targeted by wholesalers are “desperate’ as they are behind on payments or in foreclosure.  

Payments under seller financing may not qualify unless timed with the 1031 reinvestment.

You'd analyze it as a "cash purchase" and add a special expense category for your principal & interest payment.  

Be very clear that they must transfer the deposit along with a complete set of tenant records (application, lease, payment ledger, etc.). 

Hell, someone sent me an update today on sec8 payment standards in MSA where sec8 is paying dang near $4kmnth!

I came back with 42k, but told him to take off 3k from the down payment.