California Fair Plan, ran by the state, has crappy fire only insurance and you will need a wrap around general and liability insurance with them. 

Expenses like this include things like property taxes, insurance, maintenance, administrative and office costs, payroll, marketing expenses, and property management fees. 

So, both my wife and I are full time W2 employees and are in the 24% tax bracket, and I came across the short-term rental loophole which sounds really amazing for taking write offs and using them to reduce your W2 taxable income, but also equally difficult to qualify for, unless you are within a short driving distance to your property.  

I will be house hacking my primary home and I am wondering that are the implications on Solar tax credit and bonus depreciation?

I thought going in that we would start an LLC but have come to learn that LLC's have very limited lending options for real estate and that our LLC would require us to file taxes as a business because there are 2 of us.

Nor would I buy here with the looming property tax threat against STR's. 

You actually have negative equity, or a liability. 

I was wondering if there are any potential tax deductions we could take as a passive investor. 

I am happy to speak to what I have seen as the most common set up from a tax perspective to give you a starting point for a deeper discussion, but ultimately you will want to speak with your CPA in conjunction with an asset protection attorney because this requires a deep dive into your specific situation.  

I'm wondering if he would be willing to accept an offer that has long term tax benefit, I would give him his asking price, the only real problem I foresee in the repayment would be another big downturn.