It's such a strange concept and certainly not a tried and true proven model that I condone.  

With purchasing my house only a year ago would it have a negative effect from the banks point of view?

If we find anything that has a major negative impact on our bottom line number we may go back to the owner and negotiate a lower price.  

Nothing is carried over into future years unless your taxable income goes into the negative due to the loss (can't have negative taxable income). 

Statistically, the city has low rates of crime for a city of that size within the 'rust belt', average income and unemployment figures, relatively low rental vacancies, and, most importantly, SFRs at less than 30k which, based on my understanding of the area, do not follow the popular negative sentiment on homes at this price point.  

Cash flow NEGATIVE and I am feeding it.Current deals:- SFR rehab in North San Jose- In contract to buy couple houses to flip in Stockton- bought one SFR from courthouse auction in the Modesto area this week.- Possible SFR deal in the Vallejo area.  

I think the upside outweighs any negatives.

I needed to bring my numbers down to $300,000 basically to avoid a negative cash flow.  

My father has a negative view on renting out and managing my SFR.I'd like to start a discussion on what can be done to convince him otherwise. 

So affordability goes down and a net negative effect on SFHs.