I would have to carry that 1% for at least the other 7 months. 

I did my homework on the property and found out from my Insurance Agent that roof shingles would have to be replaces because no Insurance would carry out policy on this property once I acquire.So we are about to sign a contract with a seller that has no cash reserves to be able to replace roof shingles.

The only debt we carry is for the wife's car.

@Eric Carr I would love to hear your thoughts on this question of mine as well.

Seller willing to carry a contract for 1 yr with a $25k down payment. 

Then, these would be added to your basis and carried forward to the new property.  

Will the seller carry a note on it for a while so you can fix it up a bit and hold it for 6 months at least?

Just have your investor carry a note on the property with payments or accruing interest that will be paid back when you sell.

The general is a rule allowing up to $25,000 of active participation(see below) rental real estate losses as a deduction against nonpassive income meaning you dont have to carry them forward.

OWNERSHIP seller finance tools are:Subject to - getting the deed and leaving existing finance in play - you own it 'subject to' the existing financingWrap - getting the deed by establishing a new note and deed of trust from Seller to new buyer/investor, and leaving existing loan(existing note and deed of trust) in play , but by Wrapping it with a new note and deed of trust.Straight Seller Carry - getting the deed by establishing a new note and deed of trust from seller to new buyer/investor, and it's exactly like WRAP, except seller is free and clear.