Passive losses can only offset passive income—they don’t reduce your W-2 income in most cases.So while your duplex rental may generate losses on paper, they won’t reduce the amount of tax withheld from your W-2 unless:You qualify as a real estate professional, orYou materially participate in a short-term rental under 7-day average stays, orYou have other passive income to offset.What to do instead:Don’t stop your W-2 withholding entirely unless you’ve worked with a CPA to confirm a significantly reduced tax liability.If your rental qualifies under STR or REPS, then yes—depreciation and losses can offset W-2 income, and you might reduce withholding.Otherwise, you can still update your W-4 to fine-tune your withholdings slightly if you tend to overpay and get large refunds, but be conservative.Run a midyear tax projection with a real estate CPA who understands REPS, STR, and passive loss rules.

Unfortunately, as I have been analyzing properties in my identified neighborhoods, I haven't found anything that fits in my buybox and generates enough cashflow to justify the investment.

The operations team for short-term rental is the leading indicator for your profitability.

I looked up each profile of those advocating OOS BRRRR- Kerlous Tadres and his AI generated reply that managed to get 3 upvotes: 3 local purchases- Bernice Retzloff: 9 local purchases (all since mar 202405)- Jimmy Lieu: 9 local purchases- Ryan Rominger: 1 local purchase- Ryan Rominger: 0 purchases listed- Ryan Rominger: 0 purchases listedI recognize not everyone keeps their profile current.  

Purchase price: $117,000 Cash invested: $44,000 My first fix and Flip property set to profit $80,000 What made you interested in investing in this type of deal?

They often have access to reliable properties and can help you avoid scams.Additionally, I’d suggest checking the local rental market, ensuring the property will generate consistent cash flow.

My 60 year old self would buy passive investments and partner with my children to buy.....duplexes and nasty fixer uppers - Rinse and repeat generationally!!!  

If there's something out there you qualify for, they'll find it.If not, since you plan on using it to generate income you can reach out to DSCR loan folks.

The people who are successful, probably are already in the business or have some background and really do not generate any more knowledge from the training.

curious, how much of your 40k profit had to go to closing costs and other fees?