You can use up to $25k a year of those passive activity losses if you are actively participating in your real estate ventures ("small landlord" exception) and income stays under $100k a year.So yes it can be useful if someone happens to fall under these circumstances, but for anyone who is going to have over $100k a year of retirement / other sourced income, they may be out of luck.It's all timing - you are just using up those PAL earlier than if you waited for the rentals to start producing taxable income (they normally do if it is a good investment), or a property is sold and PAL are released to offset that income. 

Plus they are making it more expensive to participate.

@Franklyn Douglas III I’ve never done Colorado tax sales but presuming they are like most areas they are not nearly as easy, profitable or risk free as the promoters would have you believe.You will learn a lot just by participating even if in a small way. 

Your Realtor should be able to pull a list agents who participated in recently sold/listed units in and around the subject building. 

The only one that will qualify to be used against your W2 income is the short-term unit if you are materially participating in the management of it.

Additionally, how does dilution work between class A and class B if they don't participate in the capital all?

Like being a participant at a major event where important people in that kind of field would be at?

They're also great at selling you software, more training, and coaching/mentoring....that will for sure extract a good deal of money from the participants.   

Thought it would be nice to start participating in the forums and connecting wih others, so here we go!

Assuming less competition, I believe I could secure the property at a lower price by participating in the second mortgage auction.