The economy has no effect on my ability to carry the properties and a devaluation, provided I hold long term, is only a loss on paper.For myself I place a very high value on the opportunity value/cost of cash.

JL Crowder - If you're actively member managed, you can deduct any net losses from your real estate against active income (instead of only passive).

This is because North Carolina requires landlords to take reasonable steps to keep their losses to a minimum—or to “mitigate damages” in legal terms."

The loss of a parent is tough.  

It seems the current owner, who inherited the property and seems to know less about valuation than this aspiring investor, has been operating at a net loss.

At least not without some sort of major technology breakthrough with regard to CO2.I think you may see job losses slow down or stop in coal country, but even if coal output remains the same, the industry continues to innovate and needs significantly fewer employees . 

In other words, if I am technically operating at a loss because I am spending most of my money on mortgage and taxes, can I deduct this expense and thus be better off in the long run?

So sorry for your loss.

My lease does have clauses that define Abandonment and that tenant will be responsible for any and all damages/losses incurred by me due to their abandonment.

Straight from the Fannie Mae Selling Guide - Verifying Capital Gains IncomeDocument a two-year history of capital gains income by obtaining copies of the borrower’s signed federal income tax returns for the most recent two years, including IRS Form 1040, Schedule D.Develop an average income from the last two years (according to the Variable Income section of B3-3.1-01, General Income Information), and use the averaged amount as part of the borrower’s qualifying income as long as the borrower provides current evidence that he or she owns additional property or assets that can be sold if extra income is needed to make future mortgage loan payments.Note: Capital losses identified on IRS Form 1040, Schedule D, do not have to be considered when calculating income or liabilities, even if the losses are recurring.Due to the nature of this income, current receipt of the income is not required to comply with the Allowable Age of Credit Documents policy.