When you sell a rental property any unallowed passive losses from that specific property are allowed to be deducted against your other income/gains from the property. 

It requires a 1% or 2% deductible and the house must be in an LLC.  

After Operating Expenses are deducted, we're looking at about $13K in NOI.Purchased for cash at the full asking price of $244,900, and assuming NO CapEx or renovations, that's about a 5.3% Cash-on-Cash return.What am I missing?

All of those expenses to keep up the property are deductible from the rent paid by the tenant so they reduce taxable income which directly reduces taxes. 

Could I do itemized deduction on a schedule E as an individual?

What are we legally required to prorate/deduct in rent considering it is their only shower and will not have one for 3 days?

Since the market pre-May 2022 just is not comparable anymore I am interested in anyone who has done this in CFL from around May 2022 onward successfully and how it went.The goal would be to aquire a STR that would cash flow itself, or at worst break even and also use that to maximize deductions to lower W2 federal income tax.

Talk to your insurance provider (and shop around) and ask how the rates would change if you increased the deductible. 

Even just a box store H&R Block type of professional if you don’t already use one to help maximize your deductions and write-offs from the real estate.

It would probably be months before the gears that have to turn within the IRS bureaucracy got to filing something like that - unless those gears have already ‘turned’ and you have been given notice of the intent to levy your property.