And eventually inherit all our real estate and large stock market portfolio.

How did stocks and bonds perform vs?     

That's a significant accomplishment.Deciding whether to put money into stocks or pay off what you owe depends on your financial goals, how okay you are with risks, and the interest you pay on debts.

The other option is to provide me: signed bylaws and all amendments thereto, a list of the current stockholders and their respective stock ownership, a list of directors and officers of the corporation.

In addition to what others have said, Lakewood is a city where the majority of the single family home stock is older.

Take that money and buy RE in other growing markets, stocks, bonds, index funds, high yield savings, or probably a combination of it all. 

We have an index fund/stock portfolio, dividend/simple interest income, real estate cash flow, and a low cost of living to get there.

Properties take longer to rent, rent stagnates or deflates, credit dries up, banks tighter on loan rules, credit cards decrease credit lines, your credit score drops because instead of 30% utilization you overnight go to 50-80-100% when they drop your credit line, hard money dries up for flips, stock market goes down and you don't want to take losses or can't use margin.   

This loss is designated as non-passive loss in Schedule E and hence deductible from ordinary income (W2, 1099B stock sale, etc).I see no state returns simply because of no income as well as the losses being non-passive and hence deductible from ordinary income.How is your CPA suggesting to track the passive losses without filing for state return?

i guess that depends on the size of the deal.As far as flipping goes,  how is flipping any different from buying a stock and selling it for profit?