They may offer to cover your loss.

As @Taylor L. and @Charles Carillo have wisely pointed out, this isn't a good idea.Whenever I have a contractor suggest this I always ask them, "if we lose money on the deal are you prepared to contribute to your share of the loss?"

Does the partnership just need to meet the "material participation" rule for us to take the losses against W2?

With appreciation, the gains (or losses) are estimated, not realized until the future and costly to access either by a refinance or sale.

I am really trying hard not to let it defeat me, but I feel at such a loss from so far away, tomorrow it should help in talking with a new company hopefully they will be able to help me navigate through this.

I have signed rental contracts for which I had to process refunds, have realized loss of 3 months of income so far with high season (January - April) rentals all canceled, and am going to be losing about 2X the income of the supplemental coverage limit.I know it's the insurance company's job not to pay and to estimate and undercut as much as they can. 

Here's my situation;I acquired a property and I am making repairs to it to bring it up to a certain standard before I list it on STR websites. It seems like the repairs will take some time so I won't be able to list i...

If your business for this property is a loss due to no income (not rented yet) then you should be able to carry over that loss to the next year or potentially offset other income.

He has not realized yet that he should cut his losses and take a lower price and walk away. 

If they get no action then they know when speaking with an experienced investor they will have to take a painful loss to sell from where they overpaid.