Or do people really anticipate a crash which results in a loss in property values of over 10,15, or even 25% or more??

First, see Sch-C vs Sch-E.Second, the appraisal is not performed based upon EITHER schedule.However, the GSI-Expense = projected NOI, times 0.37 is actual NOI and that has to cover the mortgage+interest, insurance and taxes.The high vacancy rate (1.00 - 0.37 = 0.63) is a killer and usually, you would take such a loss ONLY because you would be year long resident AND love the life style - - aka it's typically a bad 'investment' and you're making this choice for OTHER than financial gain.

If this purchase went bad, could you absorb the loss and still have a healthy life or will it impact you financially?

Our partner has not been active with the business in 17yrs except for taking gains and losses on his half.

The biggest losses I have had are properties that I did not visit often.  

Removing the old shingles would come at considerable additional time and even more so expense, and per the property manager (with about 30 years or of experience) one additional layer of shingles can be added without in any way compromising the roof's integrity due to weight or any other factors.Plus a total tear off would be a factor that would further tilt the needle in favor of a capitalization requirement.   

But if I do this , and write off all of this , how then would this " Look " on my taxes, meaning...... wil it show me as taking a " Loss " on this Rental ?

Probably looking at a loss on my first flip considering realtor fees.

The dumbest questions are the ones you don't ask, and just absorb the loss instead.Lots of people here have been right where you're standing.

@Brandon Leong my experience when getting insurance is my insurance broker tells me what the coverage is based on several factors that I give to get a quote (I've gotten quotes for SFR and quads):1-how far from fire hydrant and fire station (she figures this out for herself since I give her the address)2-roof age and here in Florida, wind mitigation3-age of property4-is it in a flood zone5-she does a minimum mandatory coverage amount and then I tell her how much more in $$$ I want covered. this is based on how much will it cost to rebuild.6-the rental loss is included so I don't need to ask about that - at least for me it is, not sure if others have to ask for it to be included.7-what type of electrical and plumbing are in the house if it's an older home.Perhaps talk to a insurance broker and tell them what you have and ask them for a quote.