.: I have just been notified that the house I am in contract with--that currently has tenants renting out--has been late with their rent for the last 3 months due to a job loss.

Bad location= lose money and sell at a loss after a few years of frustration.  

Hi - are there any scenarios in which mid-term rental income/losses can be considered as active income rather than passive, besides when one has REPS status?

Since the seller is unresponsive and hasn’t signed the mutual release, you still have some options to recover your earnest money.

Just like you, she can do RE as a side gig and learn a lot more while she keeps her own nest egg going and her lendability strong with a regular job.You should loop her into a major document with all of the properties and all of the profit and loss and go through them one by one and talk about whether to sell or keep, and also base it on geography for her and your collective choice of management.

I am not sure I've ever seen where the tax writeoffs are different for STRs than they are for MTR's or LTR's in terms of writing losses off against your regular income. 

A seller not fully informed of these points may have legal basis for initiating a lawsuit against the investor/buyerFrom the buyers perspective any down payment, capital expenditures, etc may be at risk of loss if they can not pay off note IF it is called due.  

Not a full bailout, but low interest long term loan could go a long ways in recovering.  

The PMI gets higher as you step up from 85-90-95% LTC.So even if you can get approved for this, you need to ask yourself are you willing take on potentially years of cashflow loss, for the privilege of owning the property?

Some of our properties that were cash flow negative initially now have the best cash flow thanks to rents going up in these great locations, and very little turnover, vacancy loss or tenant damage, etc.