Because the two prices are the same and they have costs on both ends they actually have a loss on this deal. 

My “math” only took into account PITI, condo fees, and management fees at $850, $232, and $123 respectively.I did not realize that you also needed to account for vacancies, maintenance, and CAPEX on top of that to get a true indication of cash flow.Adding these to the mix, my actual cash flow was -$585/month.Yikes.Upon my move, I figured I could save some money by paying off the second mortgage which had a remaining balance of about $11k.This dropped my actual loss down to ~500/month on a $23k investment.My property, originally worth 115k, for which I paid full price, was now worth ~$90k.Mind you, my stock portfolio had also dropped significantly.For my next military assignment, the Air Force moved me to Edwards AFB, CA in 2009 which is in the Mojave Desert about 1.5 hrs.

If it goes on the Schedule E and there's already a tax loss from depreciation, then the interest deduction would not result in a lower tax bill, but simply get carried forward to offset future rental income. 

You may be limited by time, money or other factors that would make some choices not feasible for you at this time.2) Set a reasonable goal for yourself based on what type of investment you're going to focus on.  

It is fairly typical that a loan for sale has undergone some form of loss mitigation practice and failed or deemed unworthy.

If depreciation is deducted against collected rents before partnership distributions are made, then the distribution ratio would only apply to the net income or net loss incurred.If the net income is evenly split, the high bracket taxpayer will have less after tax income from the property than the lower income taxpayer.  

He's paid:1 - What ever cash he originally put in plus...2 - What ever losses he's incurred over the time of ownership (this would be "zero" if he's cash flowed the entire time, plus...3 - What ever he still owes...in this case $38,500.Since everything else is profit (cash flows), all he really has to do is sell it for more than the total of listed items 1 - 3 above, and he makes a profit....cash flows plus difference of what sells it for and what he paid (items 1 - 3) for it.This is one of the unappreciated advantages of owning rentals instead of flipping.  

How do we go about recouping our loss for the last 50 days?  

From reading this it seems to me that you are letting your personal feeling get the best of you.If they are good tenants and it seems that they might be, then step back and take a look at your feelings and then measure that against the stress and loss of revenue if you have trouble in the near future.

My opinion is that, particularly in Dallas, most of the losses were actually the result of a lack of available funding or the changes in qualification for funding.