@Victor Yang To use the rental losses to offset any active income (W2), you'd have meet Real Estate Professional status (which would be difficult to do with a W2 job because you'd have to work more on real estate than any other job to qualify) OR have an AGI of $150K or less.

The loss of priceless art, jewelry, autos, memorabilia and watches could often match or exceed the property values.

@Hitanshu ShahDon’t expect to recover losses—it’s usually not worth the time or cost.

Learn the eviction procedure for your area, perhaps contact a lawyer in the field to help you with this one, and get the fraudster you're currently housing out on the sidewalk to sleep in a cardboard box where they belong.You're going to lose plenty of money here, but this will never happen to you again, and you can minimize your losses if you move as quickly as possible.

This negative position can consume years of cash flow to recover.

@Donald Hatter We send the information to a collection agency who attempts to recover the money; after they make several attempts they place it on their credit report. 

Lending and insurance are based on predictability and without question the frequency and size of losses will continue to eclipse prior records.

Taking the loss now is preferable to paying out monthly for the privilege of being a landlord.

The state laws (do not quote me) appear to not let these companies increase rates (or its not easy) to pick up the losses.

For me as well as the seller.First, you have to define Sub to financing.Do you mean the reckless kind where you overpay for a property, take over the financing and borrow from others to cover closing costs and holding costs when you have no money, no credit, no income, no reserves and can't tell a warranty deed from a deed of trust and you close on the kitchen counteror do you meanbuying below market value, already having a nice income, having reserves, using escrow and title, already understanding the due on sale clause, have done a lot of creative purchases and know when to use and when not to use creative finance and how to recover if something goes amiss?