It might be better to cut your losses now rather than gamble on cashflow, potential vacancy and declining values.

Your fav food.

Suggestions:1) get good rental property insurance that covers loss of rents for covered reasons: fires, etc; 2) be a good landlord and treat your tenants as customers you will reduce liabilities with an ounce of prevention; 3) Get umbrella insurance which also helps to covers your assets in a suit; 4) IF you get an LLC you must run it as a separate business or it will not provide you any protection (I'm not an attorney, but that's my understanding); meaning if you combine your business funds with your personal funds, they will be able to demonstrate it behaves as a straw company and really the courts should ignore it as a separate legal entity (my understanding of the risks).  5) LLCs can make lending/borrowing more difficult, until you want to borrow non-conforming loan funds (non-Freddie/Fannie) or you hit your 10-15 property limits with Freddie/Fannie, at which time you'll need to go to commercial lenders who will WANT the property/loan to be in an LLC.  6) As you grow your portfolio keep in mind conventional lenders will look at your DTI (debt to income) ratios. 

This rehab is likely $100k based on what I am hearing and with an exit of $275k (you need to use the lower of the range in this case), then your max offer would have to be in the $110k range, I doubt the seller is willing to take that big of a loss and reduction in price but you never know until you ask.

Each room I charged the same rent rate for and rent covered all utilities.Kitchen: Fridge space was a little bit of a challenge, but it was more-so cleaning it out... we pooled food (split the bill) but all of us were the same eating style and one of our roommates directly benefited from us cooking his meals.

Is it actually costing $150 out of your pocket or is that an unrealized/assumed loss due to capex and vacancy budgeting? 

That being said, what are your suggestions on the best way to receive the smallest loss from all of this?

I purchased a home via “Subject to”, I’m listed as additionally loss payee insured on sellers policy & of coarse I own the Deed.

You are responsible for mitigating your losses by re-renting the property.

With depreciation and tons of mortgage interest and property taxes you’re probably paying, you’ll most likely show a loss on the property for awhile and not have to pay taxes.