Some criteria we are looking for: Price of $350k or less, a townhome, or low HOA condo, or single family home, areas of North Burnet (Domain) or East Austin, close to future development or current public transport options, no/minimal renovations required to be rentable.Our goal would be to rent the property out to long term tenants.

That said, if your losses are not too deep, you may want to just move forward and chalk this up to a mistake you made (not staying heavily involved in the project to check up on it daily or at least multiple times a week.

Hi Ronnie, Super sorry to hear that happened, I would document everything you can clearly on losses accumulated as well as proof of negligence on construction you say he has not done correctly.

Less of a loss of revenue than discounting the rent by $100-200 a month.

Remember, you can ride the rollercoaster, but you only realize a loss when you get off the ride.  

You may also be hurting now because you didn't file a state tax return in those years because now you lose out on claiming the losses allocated to that state.Your accountant likely didn't want to file in MA because he would have to pay an additional cost to file there...or he was grossly negligent(or both).

Reason I ask is that for minimal build cost you can make the party wall a 2hr wall and then have the ability to sell each unit separately (like a townhouse).

I am early in my research, but It seems like PAL rules- passive loss options might be a possibility (I make less than $100000 and less than 25,000 in costs)?

Very high renters population and several stable employers so not overly worried about population loss in the next 5-10 years.For sale for almost a year, the owner passed and his son lives out of state and wants nothing to do with it. 

Any losses you have will be carried forward to future years.