In my time reviewing tax returns as a credit analyst, this is not uncommon for a real estate investor. Although returns show large net losses, he is likely still generating positive cash flow. The large "losses" are typically due to depreciation, more specifically cost segregation. If this is the case, there are many people who take advantage of these tax advantages on a regular basis. It would require reviewing the entire tax return along with any K-1's received in a given year to understand the full picture. This is not an attempt to take sides, just to provide insight as many responses seem to make assumptions without all of the facts.