My question is, do I just use the heavily reduced price I was able to purchase it for since it was vacant, and then the material cost of what I renovated plus what things I did contract out, even though that basis would be way under what the other renovated houses that sold near me per SF sold at, or are you able to use similar comps to determine the depreciation basis?

To intentionally reduce the leverage more than required is a foreign concept to me especially in the San Diego market.  

I again state the problem is with the underwriting.  8.5% vacancy, pm 15%, 25% turn over (using my reduced numbers) or 37.5% using your actual, my minimum maint/cap ex would be 50%, prop tax, insurance, missed payment (seeing my vacancy only included the one month turn over), P&I?

Disallowed losses under wash sale rules increase the cost basis of replacement securities, potentially reducing future taxable gains.This post does not create a CPA-Client relationship.

Freddie has similar intricacies, but also does not require a two year history of receipt; https://guide.freddiemac.com/app/guide/section/5306.4If you can use the rental income to drive the DTI down so that you can reduce the down payment similar to that of the FHA product, the benefits of the conventional option will outweigh the FHA option, as I'm assuming you have a strong FICO based on rate quoted with no points.  

I've seen a few hundred dollars for lease renewals versus they may charge a month's rent to find a tenant and you are reducing the risk of having a bad tenant with the turnover.

And all of this happens during the contract period reducing purchasing risk.Great strategy especially when practiced just on the outskirts of a major metro area in a country setting(a weekend getaway property that can be marketed to city folk).  

Using a 401(k) loan reduces your emergency liquidity, which could make the investment riskier if unexpected costs arise.

It’s hit and miss, really need to deeply understand what they offer, if they will work for you or against you, whether they sign the lease or you (I prefer me, to reduce that lock jn). 

I have dabbled in real estate, but never heard of brrrr before now, and transparently never did much research outside of knowing that property ownership was a way to reduce my taxable income.