If you're trying to keep everything conventional lenders are going to want to see income and not losses.

.$50k down payment Loss of $1,100/mo for 36 months = LOSS of $39,600 So, now you move out. 

It's 70% completed, and I'm selling it off to another investor as a wholesale deal (so I can be done with the partnership ASAP).Luckily, it will end up being profitable for me, but only because the contractor was reasonable and is willing to take a loss on the deal because he didn't follow through (and we got lucky on some appreciation over that year). 

His wife had to evac with the cloths on her back and the small animals they had to let there horses run free.. and they have been camping in Kelseyville not know yet if their home is destroyed and where their horses are.. this type of disaster far transcends the worries of absentee landlords and their properties which are probably all insured and if they are not then the landlord is an idiot... plus you have loss of rent in most..

The limitation is for the amount of losses you can use to offset your other income.

They are becoming more popular as PMs are trying hard to keep market share from losses to people managing properties themselves. 

He may be getting rid of a house that he has his unpleasant Mother in law living next door to him and will sell for a loss. 

Loss of structural integrity such as leaks, and loss of aesthetics.

Concerning complaints from Mark David AKA Mark Aguire of LA, California – Investments are risks and you can’t blame one small loss out of several gains on PIP-Group, or Charles Sells.

Making 0% here is a net loss of $11K (excluding increase in rent).For those reasons, I'd compare this cosmetic rehab to a bond with a 10% yield...except if the bond never pays you back your principal.