My agent tells me that losses are calculated on three year runs and diminish over that time frame.

An older building with the repairs can wipe out any cash flow for years.If you are investing this kind of money you really need to partner with someone in your area to be your advocate and show you things you do not know to look for.If any utilities are paid by the landlord is a huge one.With inflation coming around the corner utilities could spike and annual rent increases would not follow at the same pace.This would make you have diminishing returns over time.It would be better to have utilities on the tenants paying it as the cost would be paid by them and you preserve your margins.

It sounds like the landlord's health is failing and his ability to manage the property has diminished.

Begin by understanding RE basics, the tax advantages, financing, market influences, repair estimates and maintenance to apply to your operation, but the 7-12 year range is mainly due to tax depreciation taken beginning to diminish over time, the greatest advantage is in the early years as appreciation is not considered nor increased rents for depreciation. :)

It is also the only way sellers will be able to unload distressed properties that are un-mortgageable.But if you are looking for fairly turn-key properties the advantage of cash diminishes and may not be worth it to you.

Do you recommend staying away from irregular builds altogether since they diminish the effect of luxury improvements?

Your cash flow will decrease from both vacancies and maintenance, which will diminish your return. 

As time passes, the return from the capital paydown diminishes, even more than my curve indicates since 5% appreciation increases the equity, but the rent will go up. 

The down side is increasing taxes reduces economic activity, so it has diminishing returns. 

Stop diminishing your sex and strength 'as a woman'