Your credit will be dramatically affected if you get to foreclosure. The foreclosure will stay on your credit report for at least 10 years. With a short sale, the credit report on your mortgage will show deliquent, but will eventually age as time passes. Once the home is sold on short sale, the credit report will indicate paid in full.
Eventually in a few years, if you pay all of your other bills on time, your credit will start repairing itself just by aging itself.
Your other optioin is to negotiate a loan modification. I've seen this done on owner occupied homes, second homes AND investment properties. Call or email me and I will be happy to guide you through.
Hope that helps,