If you actively participate in the rental real estate and meet certain criteria, you may be able to deduct up to $25,000 of passive losses against non-passive income, subject to income limitations.

I don't believe an attorney will actively participate in a process that knowingly violates a loan. 

You maybe able to do a cost seg(needs to be done by a professional) and get bonus deprecation BUT you maybe not able to use it since you would need to be real estate pro or materially participating via the short term rental loophole to do so against your active income.

It would be better if they contributed more money and they were an active participant in the deal with you.

Positive Community Impact:By participating in the CityFHEPS program, you contribute to addressing the critical issue of affordable housing in New York City.

However, if you are qualifying for material participation then you have the ability to take those losses and offset your active W-2 income; which is probably what you heard in the podcast.

Lawyers participate in the real estate sale process as a matter of custom and practice.

Personally, this could not be worse news for my buyer/investor focused growing business, however my role is not going away anytime soon..For example, there have been numerous instances where the amount of price negotiation exceeded my compensation or transactions that without my (or a professionals) participation would likely not be as efficient, feasible or successful.

@Amit Shukla the STR loophole allows you to take losses from passive investments and deduct them against active income by material participating in your property. 

In general, investigation expenses and participation comes into effect when you close.