I was told the house would be treated as inventory and reported on 1125A but I shouldn't there be a greater break down of cost to show the profit & loss?

Once rerented, you can assess the damages the lease breakers did, calculate the loss of rent which the lease breakers didn't pay and then apply the security deposit.

All rented out and long term tenants, projected vacancy loss is minimal. 

He did my taxes for me and as I anticipated I had a loss on both properties (I did work to both).

HiI need a mortgage broker who can find me a refi-out, though I have some paper losses on my tax return that typical banks might not be able to see past.J

Contractors do not perform as advertised, the city puts a lien on the property because the borrower stopped mowing, taxes become due, the servicer adds an loss mitigation extra step that no one else does because they interpret RESPA differently and want to triple-cover their asses. 

From what I've found, most people just don't want to sell at a loss.

If the loss of rent is a serious issue you should probably reconsider your chosen business.

If you do your losses will multiply and a nonpaying tenant will still be resident in your unit.

Too small a gap might end up being a loss....nobody likes a loss.