Assuming you are both working and the rentals are long-term, rental losses up to $25,000 can offset W-2 income if your MAGI is under $150,000, with excess losses carried forward.This post does not create a CPA-Client relationship.

A 1031 must be for equal or greater value or the funds in excess of the value of the new purchase are taxable.

Another option would be to sell, reinvest into a house hack and use the excess on a deal.

Appreciation, in particular, is crucial, while cash flow acts as the fuel to keep the property sustainable.Your Scenario with 2% Home AppreciationHere’s how the deal looks using your assumptions:Year 1 Analysis Cash Flow: -$1,123 Initial Equity: $51,000 (assuming a $249k purchase on a $300k market value as per your report).

It might be worth a follow-up closer to the move-out date to confirm their plans, but avoid excessive contact to prevent escalation.

Unless you are talking serious money, which I would say is 2k or more in excess taxes, it may not be worth your effort.

California charges a minimum tax of $800 a year per LLC, and more if you have gross receipts in excess of $250k.

Use it to fuel you but do not fall in love with a deal and force it through. 

Some packages genuinely improve property performance, while others might feel excessive.

Deposit rent into checking account, transfer excess funds into brokerage account, make money.