This new property management company was just as ineffective, and for nearly two years, I struggled with bad tenants, constant repairs, and growing losses.

If you're negative can flowing property is going to appreciate, then it may make sense to hold on.A loss is still a loss, and I would not hold onto a deal because I'm getting a write-off.

(not all debt ever reports to credit bureaus) They do not know that the tax returns will show the income or loss from the LLC, and that there are about 4 different reports other then the credit report that underwriters use to find undisclosed debt. 

I would avoid, suffered huge losses due to 6+ month vacancies between tenants and very expensive turn repairs (~4k after only 1 year).I will update this post if my experience changes for the better 

I had the funds in savings, but this year and most of next year will be a loss until I recoup these expenses.  

In my free time, I'm a wine/food guy who loves to travel. 

If I decide to sell a rental property, my understanding is that my accrued passive income or loss on the rental becomes active income or loss. 

This creates two loan payments ($100,000 of equity and $300,000 on the new mortgage).Key NumbersHome Equity Loan Interest Rate: 6%Mortgage Interest Rate: 7%Rental Income: $3,000 per monthExpenses (management, taxes, insurance, maintenance): $800 per monthIncome and ExpensesMonthly Rental Income: $3,000Monthly Expenses: $800Monthly Mortgage Payment: $2,000ExplanationThe investor earns $3,000 in rent each month.They pay $2,000 on the investment property mortgage and $800 on other expenses.This leaves $200 profit each month or $2,400 per year.However, you have to pay $6,000 interest on the equity borrowed.This leaves you with an annual loss of $3,600.This example shows that while the rental property generates positive monthly income, the interest cost of borrowing the initial $100,000 results in an overall annual loss.

Just to set the record straight, because Praxis Capital was mentioned…I have been investing in real estate since 1989, and Multifamily since 2002, with zero investor losses.  

Since you file jointly, if she meets the material participation test, you can offset your W2 income with STR losses.