At least for me, it will impact some decisions I make down the road...Assume a rental property that generates 2% of its cost in monthly rent and that operates at a 50% expense ratio (actually, expenses + rent loss + capex). 

Study up on how an LLC in your state operate, then look at how an LLC allocates capital and profit/losses.

I still have the go ahead from the seller but now no buyer as this is not a distressed situation so seller will not sell at a loss. 

If you deal with a broker who's not active, the major loss in $$$ comes from the vacancy factor.

I might get an energy audit, to see how much heat loss I get through the walls.

They often seek three things:  1) stable / mature markets to invest in 2) the prospect or probability of asset appreciation (where real wealth is generated) and 3) passive losses to offset the excess income they already generate.Just like an investor seeking cash flow will find it difficult to compete on price with a buyer who intends to live in the property they are buying, a cash flow investor will find it difficult to compete on price with a wealth investor who is less concerned with income and deems short term cash flow losses acceptable.In Los Angeles, Pasadena included, you are competing on both ends.  

Disclosure: I represent Affinity Loss Prevention Services, the chosen loss prevention partner of NREIG/AGMThis question and a few items came up in another thread and warranted further discussion.

Furthermore, they will be paying off the mortgages and I will be depreciating all that passive loss.

They tend to know this because some landlords will do a repair and then claim a higher gallon loss than actual to get a larger reduction.     

Education prevents financial losses by helping to avoid mistakes and wastes of time and money.