Real estate, by default, is passive and the primary way to avoid the passive loss rules is to qualify as a real estate professional.Full-time employees and non-real estate business owners cannot qualify as a real estate professional (aka REPS status) because one of the tests is to spend more time in real estate than anything else (and it’s unlikely that you can convince the IRS or Tax Court that you spent more time in RE than your day job).

Now people's minds have been so polluted with this marxist-socialist drum beat for decades that people now default to a socialist answer of "Make Them ____, that's the answer, MAKE EM DO IT MY WAY" and that will fail every time because the very framework is designed to operate opposite. 

And whoever makes the payments on the mortgage could stop, resulting in a notice of default, leading to foreclosure…making this a risky situation for the wife to be in.  

Also if I was cosigning I would have a separate agreement with this person to make sure I could easily take every asset they have in case this loan defaults. 

When it will happen is if/when you default on the mortgage.  

As we tell our investors who participate in the commercial loans we originate or purchase - a certain percentage (about 5 - 10% ) will go into default.

:Class A Properties:Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.Vacancy Est: Historically 10%, 5% the more recent norm.Tenant Pool: Majority will have FICO scores of 680+ (roughly 5% probability of default), zero evictions in last 7 years.Class B Properties:Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.Tenant Pool: Majority will have FICO scores of 620-680 (around 10% probability of default), some blemishes, but should have no evictions in last 5 yearsClass C Properties:Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation.

So, I generally paint all woodwork bright white semigloss which is the default white color that already comes in cans ready to go.

:Class A Properties:Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.Vacancy Est: Historically 10%, 5% the more recent norm.Tenant Pool: Majority will have FICO scores of 680+ (roughly 5% probability of default), zero evictions in last 7 years.Class B Properties:Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.Tenant Pool: Majority will have FICO scores of 620-680 (around 10% probability of default), some blemishes, but should have no evictions in last 5 yearsClass C Properties:Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation.

You could charge a higher interest rate and negotiate the down payment that way you still get your money monthly & not worry about repairs etc. if the buyer defaults, you get the property back.