You should definitely talk to an accountant, but there's no reason the paper losses for your rentals wouldn't offset your W2 income.

Particularly sellers who are in some kind of financial distress or are otherwise motivated to sell (probate, foreclosure, job loss, divorce, etc). 

It will take you 28 months of an extra $50 per month to make up for that $1400 loss. 

I had him do a quick inspection and he found rotting/ molding food.

Review the T-12 (Profit & Loss Statement)3.

How much vacancy/credit loss can you handle? 

Due to an unexpected opportunity to travel for work, I now rent the unit at a slight loss per month.

After several losses, we studied other markets that were growing, had new tech employers, a revitalized downtown and began buying out of state. 

I think I am over analyzing and digging deeper than necessary in the business entity, at least right now.Only thing I would say is I am trying not to play with cash the puts food in my mouth and want to invest in something I actually have control over (unlike the market).

Losses are near $10,000.Those are just a few examples and I have many more.