Why is the 50% rule so negative while the cash flow is positive?

We are in the DC area and I have never heard negative comments about them. 

In the current environment, my under writing (that most would consider to conservative) depicts large negative cash flow after a maximum LTV refinance.- cash out refi loans have higher rate than if cash out was not occurring.  

I made above market rate rent over 2 years and I vaguely can deduct how much they grossed and they were probably negative cashflow a little as the business became less lucrative but with all the nice furniture they invested, it should be either breakeven or lost money.

But at the end of the day, well located properties in which the owner has ample liquidity to ride out long-term cash flow negative periods, rarely lose money.  

If possible, I always recommend using your own capital starting out to prove process and concepts before taking hard money for flips.

.$10k STR rent on $1.3m property at 80% LTV  will be negative cash flow when properly allocating for all the expenses.  

rental 1 - 2k overall after depreciation, expensesrental 2 - 10krental 3 - NEGATIVE 15k Overal rental loss/profit for year (after depreciation, expense, etc) for the 3 rentals is NEGATIVE 3k that cant be written off, but carried over since +150kOr is it ex. 2Rental 1 - 2k and Rental 2 - 10k are added for 12k.

Quote from @Nathan Gesner:Even on a property with negative income for a year and has been on the market for more than 90days?

He already has his mortgage - so, a blemish on his credit really won't negatively impact him.All you could go after is his bank account and state tax refund:(