@David B.

If you're going to buy OOS, look at Class A or B and get to know those areas on a detailed level (fly or drive there multiple times).  

Those areas have higher rents, lower vacancy and higher appreciation.If you manage class A or B assets it’s not awful as most tenants are not professional tenants trying to live rent free for years.

I think more people do not understand the risk of seller financing. all the people I see applying for seller financing could not get a visa card there credit is so bad and there savings is from the pennies they find walking down the street. 

The property is in I would say a C+/B- part of town. 

That's a great point @Bill B.

@Craig Bowman Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a Class A property in Class D area, what quality of tenant will you get?

Quote from @Bill B.: I agree with everyone and would add:It’s California.

The second piece is whether or not you pass the Material Participation Tests found in IRC 469 and the third piece is whether your participation rises to the level of Substantial Services (think hotel, B&B).4) My CPA Says I can't deduct a loss that was generated! 

For recent purchases: less than 3 years, you probably have to grow with them and think about how can you maximize returns: maybe ADUs, or Coin-laundry or e-pay, renting space on the property for storage, air b and b or mid term rentals, splitting the lots, Tic sales etc... or value add to increase appreciation faster!!