Another consideration is if the property doesn't sell for what I'd like I don't want to be missing out on the rental income, which is substantial.

I'd offer them a substantial amount of money to leave.

If there is a situation in the future where the losses would be helpful - say one of the properties has significant rent increases and starts producing some substantial taxable income, or you sell a property at a gain, - then no reason you can't implement a cost segregation study on one of the originally acquired buildings in that later year.

Thus assume its a wholesale deal.2. a HML lender should still close on this as long as with the HML loan and the liens there is still substantial equity.

@Jeffrey Swanson as a person who has done a substantial volume of sec8, i can not stress what a cash-cow it can be, and what a financial obliteration it can be. 

I have excellent credit and fairly substantial cash reserves, so I know its just a matter of finding a good deal and negotiating terms.

With much of the economy shut down or hobbled as a result of the pandemic, forecasters initially worried that states and localities would collect substantially lower amounts of sales and income tax and face major budget shortfalls as a result.

There is a second step: material participation.Tests for Material ParticipationTo materially participate in a real property trade or business, the taxpayer must be involved in the operations of the activity on a regular, continuous, and substantial basis.

If you have no loan your cash flow is substantially more so that means more taxes.

Also, you're saying that that property generates a 21% CoC return and I find that hard to believe unless your implementing a substantial value add plan.