Because of depreciation many people generate a passive loss from renatls even if the rental cash flows. 

We were hoping to wrap this in a 2nd home loan to minimize out of pocket costs.  

Cash is great to have on hand, but remember that cash is always losing value when sitting in a bank or under a mattress (and this loss is accelerating).

If your income is less than $150,000 per year, you are allowed to claim up to $25,000 in passive losses.

If they don’t, most of your houses will sit empty, leading to significant income loss.

If one takes a loss, it shouldn't spill over on to the other ones.

For me, the harsh experience of buying too high and taking a loss has been the main factor in reducing FOMO.

Due to a cost seg on a storage facility last year, showing a loss on paper (six-fig accelerated depreciation), I don't qualify for Fannie/Freddie, but qualify for any other type of mortgage (stable/solid income, credit, employment, cash-flow, etc.).

Due to a cost seg on a storage facility last year, showing a loss on paper (six-fig accelerated depreciation), I don't qualify for Fannie/Freddie, but qualify for any other type of mortgage (stable/solid income, credit, employment, cash-flow, etc.).

If not, what is their strategy for preventing financial loss on their investment in the event of a big earthquake?