Most people who buy 2+1 and think they can use the third and get busted on that, end up renting the bonus unit to the top or bottom unit as extra space, but that is a loss on what would be unit rent by more than half.

Your losses in this one situation would pay the cost of Property Management for many years. 

If not, cut your losses, sell the home and learn from your first investment. 

Move on, cut your losses, learn from it and invest in better markets next time.

But if you place a tenant at $1,300 a month, you'll make up the loss in four months.

Do I provide my own document for what we're asking for that includes loss of use (and compensation for my time)?

However, when you get to forms 8582 (passive activity loss limitations) and form 4562 (depreciation & amortization), it's less math & more theory. 

Hi All - I've seen quite a bit of confusion on the application of the Passive Activity  Loss Rules and Short Term Rentals. 

Worst case, it gets outlawed in a town AFTER you’ve bought a place there & now you have to sell at a HUGE loss bc there’s no buyer demand once STR use is banned!

If the market slows down even just a little...catches a tiny little cold...you will lose all your money and the lender will likely take a loss also.I ran a distressed debt fund for 5 years, DO Income Fund, and we had hard limits when buying distressed debt.