I appreciate the food for thought.

Outside of my friend group I found that most people looking to rent a room in a house with strangers were medium-term type renters so there is a lot of what we call "churn" or turnover and vacancy loss.

Not to mention the loss of income for 8 months, shutting down the business and many other trickling down financial problems because of it.  

Other than that, be sure each quote covers what you need for a multi-unit, like liability for tenants and coverage for rental income loss.

I am not seeking advice on how to recoup my financial losses.

( Not sure if that's the correct terminology.)Whatever loss I take in the first year against my wife's income, does doing this change my rental income from being passive to non passive income as well?

One of my Bizz partners was the President of STauffer foods ( a Nestle company) He would talk about how important it was to personally hear feed back..

We calculate gross income as all dollars coming in except taxes.Our clients gross revenue is the room rate (top line) expenses minused out and then they receive their net income.Net profit (or loss) would be then when they subtract debt service, property tax, insurance, utilities, etc.

Welcome Scott,There's a ton of useful resources here on Bigger Pockets from calculators designed to show profit/loss to seasoned investors giving advice.

Move on, cut your losses, learn from it and invest in better markets next time.