Some of the cost that you might be able to write off would be your operational cost for your partnership (LLC) that is not related to renovating the houses.

The environmental controls are very tight and underground storage tank (UST) operators are held to strict standards for regular inspections and monitoring. 

Often times business partners skimp on their operating agreement and may not even consult an attorney, then when things go awry it costs ten times more (and can drag out for years) to resolve.

High rental demand in a market means if your property manager sucks at marketing units or has operational inefficiencies, units are still going to fill due to higher tenant need.

Filled vacancies (now operating between 95-100% occupancy).

On the commercial end, where I operate, deals are brought to us by brokers or lending institutions wanting to get rid of a note either in default or one that no longer fits their portfolio.

I suggest properties occupied by investment grade public companies or strong franchisees/operators of national brands with 10+ years remaining on the lease contract. 

As this is the case you could have just continued to operate the rental in your name. 

I am planning a trip to Cali next month.I was told from the standard mortgage operator on the phone, that I would better talk to their Private Mortgage Department or Advisor.

Hobby landlords have a very strange idea as to how a business operates.