The IRS doesn’t love what it calls form-over-substance techniques, and instead relies on substance-over-form principles. In other words, you typically can’t repackage one thing (like residential real estate) as another thing (like rental real estate) and pretend it’s not the first thing to avoid paying taxes.
The IRS has long considered profit motive as a critical factor to determine whether an enterprise is legitimate. Rental real estate has a long term profit motive although may show losses up front, there is an ultimate goal once homes are depreciated. This is not your goal... another reason the IRS would reject it.
This also falls into what is considered related party transactions and you can not report losses on non arms length related party transactions.https://taxmap.irs.gov/taxmap/ts0/relatedpartytransa_o_12ae2a31.htm
The Tax Cuts (TCJA) also adds a layer in the form of a new loss deduction rules. https://home.kpmg/content/dam/kpmg/us/pdf/2019/03/tnf-wnit-tcja-apr1-2019.pdf
This is another one of those, well everyone is doing it.... just a matter of time before they are caught. And as others said, other costs and loss of deductions may more than offset your perceived positives.
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