I beleive whether they count your paper losses as actual losses or not is determined if your lender has any overlays or not.Someon ccorrect me if I am mistake. 

You take on the role of digging deep into their pro forma and grading it like a teacher instead of writing the paper yourself. 

(you do not pay the taxes you lose the house, and you do not pay the insurance the lender will put insurance on the property for you)  Assuming the properties are showing up on your tax returns the income/loss will be calculated from the returns using this form:  https://content.enactmi.com/documents/calculators/Form1038.C...The form will allow you to add back your paper loss of deprecation on your returns as well as your property tax, insurance and mortgage interest deduction as those last three are already taking into account into your payment as mentioned in the first paragraph.

However, you could still have - cashflow on paper, but still break even or potentially have + cashflow on your taxes.

We mix it up with performing and non performing loans and we have some performing that are short term bridge loans as my confidence in reperforming paper is low based on the re default rate risk.One last thing to touch on, there was a comment that I am one of Marco’s henchman.

They don't tell you about all the out-of-pocket cost for mail outs and paper direct mail. 

Generally places with high cash flow on paper are cheap homes in not so great areas where you have higher turnover, damages and real cash flow is lower.

yes the cash flow looks amazing on paper!

Equity is great on paper, but it may not mean much when the first position balance has grown exponentially due to accrued late fees and penalties and the property is selling for maybe 70 cents on the dollar at auction. 

So the "high equity" thing may just be paper, go get it realized.