We’re at a loss on how to resolve this and make our home livable again.

Once you have REPS the distinction between passive income (or losses) and active income (W2) disappears and all those tax losses you have been banking can be applied to the W2.Good luck

The income/loss flows to your personal tax return. 

Loss of income is another coverage that you will probably want to cover any period of time you can’t rent out the apartment due to a covered loss.

So, if the tenant did that and got fired, you are the landlord would compensate them for the loss of their job?

I've kicked the can down the road, and it ain't good.If you don't think a higher paying tenant will not show up, I would consider cutting my losses and trying to sell.

From utilizing 1031 exchanges to offsetting gains with losses, the right approach can make all the difference in your investment journey.

That said, I'm considering selling the property to cut my losses before they happen.

We like being aggressive in stock market investing but more conservative in real-estate given that we plan to use that for cash-flow eventually.The options are:We expect to have $200K/year in taxable savings the next 5 years (barring a job loss)- Pump all savings to the stock market & keep the current rental properties as-is and payoff the properties over the next 15 years using cash-flow for snowballing.

Additionally, if you have too many personal use days, losses may be further limited by the Sec. 280(A) vacation loss limitations.