If you look at the transaction as a whole, you took a massive deduction one year, likely paying no tax and losing tax attributes, then in the final year, you pile all of that deduction back on top as ordinary income in a year you likely have higher income....I am not saying it is a bad idea, someone who doesn't have much income will certainly want to weigh this possibility and consider their timing. 

My current brokerage focuses on this niche and has the right resources to fill this niche.

I've also read and learned a lot on this site and its great resource for information.

The knowledge and resources are here.

Now I’m talking about finding a property that needs less work than a flip, mainly cosmetic, that way the outlay of cash isn’t over the top. 

I am sure you will find no shortages of resources and help here to achieve your goals.I would be happy to connect.

The water was almost to the top of the garage door.

Attorney fees were escalating, etc on top of bank fees, interest, etc.

If you want to invest now, I believe what you're looking for is either: a first lien HELOC for a lot more than your current mortgage, or, a second lien HELOC on top of your mortgage.

Brandon's book on Rental Property Investing would be a good resource as well.