I actually enjoy the sect 8 arrangement because the tenant is being threatened with loss of their voucher by not paying their portion.

The $25K "cap" (special allowance, really) is for passive losses, not depreciation. 

Bloomberg.com asked real estate website Zillow.com to help us figure out which U.S. markets have been the riskiest over the last 35 years.Our measure of risk: Assuming buyers held on to their homes for five years before selling, what was their chance of suffering a loss?

There are literally 1000s of paint types, and most will not work in this application.PS - we did a metal roof on an IHOP restaurant, and for some reason they painted it This spring (original paint was in GREAT shape, and had 30+ years on it). 2 months later the "new" paint came off / became grey, and they just painted it second time, two shades off - I really have no idea why - probably corporate rebranding, as the also redid the exterior

Are you stuck with major losses because you have to pay closing costs and carrying costs? 

If he want's to cut off the hand that feeds him it's his loss. 

so the only way to mitigate my losses from cap gains is to live there for one year and one day?

If you buy a property, with title insurance, that insurance will not cover you for a supposed loss because you didn't know what property you were buying.

Not a bad buy, but there is better out there.Shame you painted the 2nd bedroom, i hear that shade of green is coming back :)   

Here's a hint, your CPA is going to tell you to write everything off and take a big loss, that's fine as along as you don't plan on buying any more property's, or make a lot of money.