Plus for its high cash flow potential, utilizing a 1031 exchange to reinvest gains effectively made this experiment a relatively low risk for me.

That's where you will gain in cash flow. 

The accountant said that NJ allows one to “adjust” the basis in the property to the extent no benefit was obtained from depreciation...you do not get to take losses from real estate to offset gains on sales of property in NJ.

I have absolutely nothing to gain here whatsoever so I'll bow out of the conversation.

Starting small through house hacking, long-term rentals, or flipping helped me gain experience without taking on too much risk.

Focus on cash flow and exit strategies, and consider starting with a smaller project to gain experience and minimize risk.Good luck!

The losses just pass into future years that will eventually offset future gains.

However, these costs can often be added to your property's basis, which helps reduce capital gains tax when you sell the home.Once the property is officially a short-term rental, subsequent repairs and maintenance would likely qualify as deductible expenses. 

Have you read Traction? 

and am eager to connect with experienced investors to gain practical insights.What I’m Looking For:Advice on identifying cash-flowing properties and understanding market trends in Lynchburg or similar areas.Recommendations for a local real estate agent or property manager with experience working with investors.Insights on how to balance active and passive investing as I grow my portfolio.I’m grateful to be part of such an inspiring and knowledgeable community.