If you think ahead, you can minimize recapture with the right tax planning.So what is recapture?

We will send you $1,000 (towards the $6,500 loss.) that we send when the loss shouldn’t actually be covered.

Quote from @Daniel Murphy: While not really a loss, one of my biggest Ah Ha's in 18+ years of managing money professionally is that Financial Questions do not always need Financial Answers... 

My plan is to sue the previous owner to minimize my financial losses and, if possible, take legal action that benefits us..

Collect minimal cashflow after repairs/maintenance for what - 15% equity capture and breaking even on cashflow?

Normally maintenance costs and loss of rentals are less than 10k per year.

But I’m cautious as I read about recent post on biggerpockets about sponsors underperforming, asking for capital calls and losing investor capital.What I want to learn is how to minimize my risk and avoid placing my money with sponsors who are more likely to lose my money. 

Pay minimal rent, perhaps something equivalent to the mortgage payment, so there is no cashflow. 

STRs do not require you to be a REP in order to take losses against ordinary income.

If you’re able to use passive losses to offset your active income, then doubling down on cost segregation and bonus depreciation might make sense.