When a borrower has a history of receiving rental income from the subject property since the previous tax year, the borrower must provide most recent Federal Tax Returns, including IRS Schedule E, covering the previous two (2) yearsCalculating Effective Rental Income � Any net rental income from the subject property must be added to the borrower’s qualifying gross monthly income after averaging the reported net rental income/loss reflected on Schedule E of the tax returns.� When calculating the average net rental income/loss, any depreciation, mortgage interest, taxes, insurance, and HOA dues reflected for the subject property may be added back to the net income/loss.� If the borrower has owned the subject property for less than 2 years, rental income/loss must be annualized for the length of time the property has been owned.

If they fit the definition of a "real estate professional" not only is one allowed to deduct ALL expenses in the current year and will no longer have to carry over losses that exceed their income over the years as with passive income, but, if married and filing joint, they may even deduct their expenses against their spouse's income as well.

If you guys were in my position would you take the monthly loss or just sell it and take the hit on the sale?

The lender will give you instructions for how your insurer should name the mortgage loss payee in your policy.  

It sounds like you will take a hit, and are prepared to, but it may not be a complete loss.

The wasted money is the money you put down to avoid something that is not costing you as much as the loss of earning power on the down payment will.

Only then could you claim unlimited deductions for losses.

If needed I could use the equity I built up in a property to cover it, still the loss of an amount equal to gross rents for 3 houses for a entire year is an unpleasant thing to consider.This brings up a final thing I think all investors need .... resiliency. 

I don't know if I would make the same pricing decision if I were the airline, but they own the equipment and service you want to use, so they get to set the prices unless:1)  Enough airline passengers vote with their pocket book and choose to pay a little more for the bundled, (airline + restroom), price because they don't like not knowing exactly what their cost will be, or they have a philosophical problem with being charged for such a fundamental service OR2)  Enough airline passengers complain to their elected representatives and a law is passed saying that the airline cannot charge what it wants for it's services, nor can it segment it's pricing based on usage.Should it not be the airline's choice to risk the potential loss of business using #1 above in the hopes that they will attract more business?  

I honestly dont even think its something that I should do unless there is some type of legal paperwork that could protect me in case of a loss.