Which one is more appealing - continuing to own the house or the security of that much cash/liquidity?

Passive losses can only be deducted from passive income. 

Yes, you can deduct the 8 days rent from the security deposit.

That should cover 2 rental income periods, returning $660 to your pocket.

Co-living, on the other hand, mitigates this risk by creating multiple income streams.

If the cosigner is not contributing funds but is just helping secure the loan, whats a fair way to compensate them?

Also I am curious if you had to disclose any personal assets even if you did not use them to secure these loans in other to enter an agreement with them. 

Purchase price: $240,000 Cash invested: $60,000 I purchased this duplex in distressed condition using owner financing for $240K and secured a $60K hard money loan for renovations.

Purchase price: $77,000 Sale price: $85,000 Contributors: Peter Vekselman Partner Driven teamed up with Jamari Sprueil to secure this off-market deal in Decatur for $77,000.

I currently work at Deloitte in Cyber Security.