But my reputation to close deals added some extra weight to our offer too and finally got it done.

A loan officer should use your Schedule E of your tax return and take your Net Income or Loss and add back to this number the following deductions: Mortgage Interest, Insurance, Taxes, HOA payments, Depreciation, and any major one-time event expenses.

The contract could also say the LLC would cover a member's loss if one property had a bad year.

Further, I feel this law is very unfortunate and really a lose-lose for everyone, because the loss of (especially small scale) property managers' ability to use discretion in accepting applications will absolutely result in application criteria being raised across the board!

If they sell it to you for a loss then you sell it = capital gains for you againWas the house a rental when you went ahead and renovated it? 

Between your cost to buy it, and your expenses to buy/sell it you should be at a net zero gain or loss is my guess. 

If the depreciation recapture is $200K and there is an additional long term capital gain of $300K, could $150K of carry forward capital loss be used to offset depreciation recapture and a partial 1031 exchange be made into a new property purchased for $650K without incurring a tax liability?

As a current/prospective owner under contract to buy, you might be allowed to see the annual budget and profit and loss statement, but the board is not required to show you bank account/ invoices/ etc.

If I were to take the gradual approach and take the $150 increase as Deanna suggested, the lost rent is reduced to $2300 which makes the loss easier to take, but the likelihood of an early departure even greater.Any other suggestions??

Here is my short list:Comprehensive lender control panel with servicing notes, status on unpaid taxes, payment history, etcA 'control center' to deploy force placed insurance, and ability to have servicer send CFPB required letters to borrowerTax tracking integration Loss mitigation services with active updates to lender on control panelAn active discussion board style system that lets the lender have a dialog with servicing staff on any matter.