"Is it a common practice to report it as a loss even though I fixed it out of my own pocket?" 

Find Brandon's videos on YouTube for the "four square" method of analyzing homes and practice.

Those seem like questionable practices to me.Great stuff from your own experience here.

A college student getting an engineering degree should consider different approaches, even if he decides to deploy some/all of the inheritance in real estate, than a high school dropout working a minimum wage job. 

Yes, this is quite a common practice for professional PM companies.

I know that area well (went to college nearby).

This is standard business practice - just look up how many settlements the SEC makes annually where companies pay millions in penalties WITHOUT ADMITTING to any wrong doing.- Cash-for-Keys is another example of this!

Is there a best-practice on how to do this or can you share pointers from experience?

Condos are starting to get condemned, which means people are having to vacate units.I'm telling you right now, I'm a JD (not a practicing attorney) in Florida whose business is being an insurance expert for carriers, working with engineers. 

I grew up learning maintenance on properties my parents and grandparents had in Akron, then started buying my own after college.  35 years later, been full time for the last five years or so.