Certainly unfortunate for the tenants and LP's involved.

From your description, I'm not exactly clear what you are struggling with.I have been involved in several deals with agency debt that are non-recourse loans.  

To use STR losses against active income, you generally need to materially participate, which means being involved in the operation of the property on a regular, continuous, and substantial basis.

On a value-add with rehab involved, that proof usually means you've closed at least one deal and managed the execution successfully.The trap is thinking "well, if I can find the right deal, the lender will work with me anyway."

On their own, they tend to convert more slowly.What I’ve seen work is one of three paths:Partnering with a local operator where you meaningfully own underwriting, deal screening, and execution planningAttaching yourself to sponsors early as an acquisitions or analysis extension and growing into equity over timeStarting smaller than ideal to build a track record that validates your assumptions in the eyes of capitalThe scrappier routes aren’t a failure of skill.

Interest rates are another spicy factor to keep an eye on.

@James Jones When we got started in 2010, institutions were barely involved after that they got heavy. 

I would recommend just as others above to get involved with your local community. 

I’m actively involved in their Agent communities so that I’m not a drag on their resources.

It really helps have 50 sets of eyes on each of these investments, for analyzing risk.