Any expenses you put in to renovation or repairs are not deductible, but must be capitalized after the property is in service. 

You operate a trade/business - then you have all deductions AND an obligation to issue 1099sB.

Aside from filing a police report, your insurance should cover your damages less the deductible, and will abrogate damages against their renter's insurance if they have it. 

Our portion out-of-pocket was the $3K deductible. 

Also, not all labor is immediately deductible.

Hello @Kyle Luman,In the first few years, tax deductions like depreciation typically offset cash flow, depending on the rate of rent growth.I also want to comment on your statement: “Buy in appreciating areas.

However:Capital gains taxes can be minimized through deductions like rehab expenses, holding costs, and agent fees.Alternatively, if you decide to keep the Mooresville house and rent it out, you could potentially defer capital gains taxes through a 1031 exchange, but this only applies to investment properties (not primary residences).

Insurance would cover it, I would pay the deductible, and no assets would be lost.If you are in an area like San Diego where people are more likely to sue, a judge is more likely to find you guilty, and the payout is expected to be higher, you may consider an umbrella insurance policy.

And you simply deducted lot value then you got to write off 50% of the balance year one.. and there was no recapture after a sunset period.. this was the gulf opportunities act post katrina. 

From my experience, to succeed in multifamily investing, focus on networking through local meetups, online forums, and professional connections, leveraging your CPA skills to analyze deals and optimize deductions.