Nancy, I just modified five of my rentals to positive cash flow, lower balances,lower interest rates, and forty year loans. You need to call your lender and get positive on your investment. If that is not going to happen you need to make a business decision to keep your credit in good standing and do a short sale or to keep the rent while your lender takes back the property. The cash you put down is gone right now so you need to make a decision on what works for you now.

The best answer will require you just putting pen to paper. The 'real value' of the property is only at the time you buy, and the time you sell. If because of your losing your job, you can't afford the negative cash flow, it might make sense to let the property go, but only as a last resort.

The answer lies with your lender. I am experienced as both a home retention consultant, (to help do loan modification or refinance), and also a short sale realtor. The package you need to put together to discuss with your lender is the same information. Once you discuss it with your lender you can best decide if they would consider some sort of loan modification, or you would be forced to give the property back.

Fact 1- don't let anyone tell you that you can't do a loan modification...except your lender.
Fact 2- doing a short sale will in all cases be in your best interest over a foreclosure.

You will hear lots of 'experts' saying otherwise. If you'd like articles to discuss this please contact me. I"m finding alot of misinformation being bantied about (I'm not referring to here on Trulia). Your lender has the answers for you . You just need to know how to communicate with them, and what information that they would require in order to make a decision.

Nancy, if you get informed, you'll feel a lot better about how to solve this. Best of luck to you!

Nancy -
This is a difficult question to answer from the facts above....there are several different things to consider to help you make this decision. First, is the property currently rented? How much is your negative? Can you tolerate paying it and if so for how long? Would it be beneficial for you to move into this home or do you own other property as your primary residence?
I know things seem bleak right now...I also purchased an investment property at the height of the market - paid $345,000 with $100,.000 down so I owe approx. $240000. I just sold the same model in the same neighborhood for $190,000. I took have a negative on it - approx. $200 per month. I own other investment properties that make up the negative though and it's a great neighborhood. This market is or is about at the bottom on this type of home in Elk Grove. We are receiving multiple offers and they are going often for over the list price. It's going to be a while however before the market goes back up to where it was...can you hang on until then?
Also have you talked to your existing lender about a loan modification? And have you considered a short sale.? You may have options that you haven't considered yet. If you would like to discuss this further, you can send me an email at Lori@ModeandDurhaM.com and let me know when I should call you. t n addition, there could be tax and credit consequences to walking away to consider. For more information on short sales, check out our website at http://www.AllElkGroveHomes.com.

Lori Mode
Keller Williams Realty
(916) 230-0371

Nancy, I can understand the difficulty you find yourself in. Some say hang on it's the bottom, some it will drop more, others it will see value return in one year-two-three-maybe never return to $375,000.

Uncertain conditions to make a life-affecting decision in. I don't know anymore about the details(nor does anyone else) than you've stated and those are not good. It might be time to circle the wagons and pull out all the weapons you have. Have you tried talking to someone like this...http://www.995hope.org/

I sincerely wish you all the best possible
Dunes

Nancy,

I can understand that walking away seems easy at this time but not good for your credit by having foreclosure. If you lost your job then the lender will not work out for loan modification. At this time, if you are unable to pay and want to avoid forclosure then do short sale, at least it can save you from foreclosure. Let me know if you need any referance to local agent who is experienced in short sale.

Blaison Samuel
Certified Short Sale Specialist
510-366-9405

Nancy,
In my opinion the Market in your area has been bottom down. We start to see more sales in last few month that at the end of 2008. There are some alternatives, for you available: you could qualify for loan modification, i.e. reducing interst, reducing the loan amount, than you can brake even with the rent that property produce or it could become possitive. See if you can do something like that. Eventially the Market will recover and you will get your $ 100K back, it can take a while.

Gene Yakubovich http://www.gemconsultants.net