The reason is because the short sale must be an arm’s length transaction.

(there are other conditions as well, you must actively participate, be at least a 10% owner, etc) If your deduction is not allowed, all is not lost.

You must inform them that it will no longer be owner occupied and will become a rental property.

I have seen on this website answers both ways regarding this (the site administrator saying leave it in Sch A, and his colleague (also a enrolled agent) advising that it can be written off in Sch E, but that there are certain restrictions mainly -- you must have passive activity gains where the deductions are covered (no passive activity loss carry over allowed.

In order to pass VA appraisal the home must pass the 3 Ss; Safe, Structurally Sound, and Sanitary.

(negative/low cash flow, MASSIVE down payments)If you are not local, you MUST have excellent property management.

I’ve read everywhere that you must file if the property is owned by a company, or if it is a rental.What about a flip as an individual?

For me personally, I wouldn't purchase a turnkey property without visiting the area in person to meet the turnkey operator, compare neighborhoods, etc., especially on the first one. 

The buildings must be a bit older and apartment greater than 15 sq-m.   

Property must be sustainable at a 75% occupancy rate.