You're wanting to create a business that will sustain itself and you in less than 5 years with no money to start with.

Section 1.165-1(d)(1) provides that a loss is treatedas sustained during the taxable year in which the loss occurs, as evidenced by a closedand completed transaction, and as fixed by an identifiable event occurring in suchtaxable year.If anyone else has a recent example of how they claimed this type of loss please let me know.

My intent is that my positive cash flow will fully sustain my desired life-style at the time I choose to leave traditional employment.

My wife and I had our first brush with real estate which came through purchasing our own home, and it sparked a fire within us to build a sustainable portfolio that benefits both future tenants and ourselves.

I haven't shopped around yet, but I imagine an umbrella policy for the pool would increase costs.I do have a smallish home maintenance fund saved of about $20,000 so could sustain any unforseen expenses for a tiny bit. 

My partner and I know we will probably have to start small and have considered purchasing one or two properties ourselves this year to test this out- but our business is not at a place yet where we can afford to sustain the losses on a monthly basis (we are well aware that we will be cash flow negative given the rates and what we will be able to charge for rent). 

Insurance protects us against losses we can't sustain by ourselves.

Regardless of which route I take (SFH or Multi), I plan to base my numbers off of the returns I would need to sustain a buy and hold investment.  

Put your interests in alignment with your investors rather than in opposition to their interests and you can build a much more profitable and long term sustainable business with the same financially sophisticated clients rather than always having to constantly search for the next sucker.

Is it sustainable?