We would like to put in a cash offer and quickly recover our money with a refinance and still be able to deduct the interest.

You can deduct that amount from the deposit and refund the remainder.

I had to deduct 5K off one sale and 9K off the other once the buyers did plumbing inspections...

The increased depreciation deductions can offset your taxable income, including gains from the sale of the previous property.

And THEN material participation will open the deductions for you.

It's important to understand the difference, and I'd recommend sticking with the REIT with depreciation advantages.The Tax Cut and Jobs Act (TCJA) includes a 199A deduction and applies to certain income from pass-through entities (including REIT dividends) and allows individuals to take the 20% deduction against REIT dividend distributions that yields an effective tax rate of 29.6% or 37% (80% for upper bracket filers).

This explains why your taxable income was zeroed out on Form 1040, even if the standard deduction wasn’t utilized.

Section 469(c)(7) provides an exception that allows qualifying taxpayers to treat rental real estate activities as nonpassive, enabling them to deduct losses against other types of income.

@Jose BotelloTax deductions for renovations in personal residences are not deductible for current use, except for home office use.

For example, for rental properties, lots of the categorization depends on the REI's specific tax strategy regarding what we're capitalizing versus what we're immediately deducting.