Come to find out SC does not allow for out of State Sched E losses.  

He purchased lower than they paid, so it does beg the question of why they are leaving Memphis at a loss?

Food for thought. 

You would be hit with a 10% penalty, plus income taxes on the TSP, plus have less money growing in your TSP until the time you withdraw (opportunity loss).  

Are you saying total construction cost + loss of rents was $89k and you were paid $95k and pocketed the rest? 

If you've completed a BRRR and later on the rent falls below your expenses AND you're underwater, you're taking a loss.

Expense Item Monthly Expense   Mortgage (includes property tax and insurance) 1027 Repairs (ex plumbing, AC) 375 Maintenance (ex yard stuff, light bulbs) 375 HOA 40 Property Management 150 Legal/Professional Fees 0   Total Expenses $1,967.00 Other: After three years, loss of tax-free profit on a sale.  

Fixit chalk it up as a loss the tenant rights in Illinois is something you don't want to mess with as a landlord

For my money, I like the idea of subsidized rent as a guarantee against complete rental loss from a flakey tenant that takes off in the middle of the night.....Good luck!

I received the profit and loss standard sheet for the year 2015 and looking to get an updated one for last year.