Here is my common sense: Investment is good to bring tax benefit. However, I won't get myself into a suicidal deal just for getting some tax benefit. The potential of losing 100K is not worth the risk. I am a RE investor, other than RE, I don't know any other way to reduce tax. Maybe RE is the one and only way for small people like us to reduce tax. If I were you, I will have to find a place within 2 - 3 hours' drive to find a property in lower price range, minimize the rent/mortgage payment gap. If I am ready to take some negative cashflow, I want to reduce to a small amount. 1500-2000 a month is simply too high for one house. However, if you own 8 houses on that amound of bleeding, you are in good shape and can be excused because over long term rent increases will slowly turn the negative flow into positive flow. But on one house for amount of loss? You are crazy :-) Don't do it.

Summary: If you have to do it, do it in a different location, hopefully 2 -3 hours away.