advice?, take your shoelaces off your shoes, and hand them along with your belt to a friend...

You gambled and lost.

What you did is called speculation for a reason.

My lottery numbers didn't win. I want my 5 bucks back!!!

With all those numbers, you might try a RE lawyer for help. Sounds like you need to sell one and live in the other or try to sell both if you can.

Try posting this on the Buying and Selling Homes forum. There are several people there who work in finance and may have some ideas.

Depending on your income, you may not be in such bad shape. It sounds like the rental property is costing you $200/month, and with some write-offs at tax time you may be close to even.

Oops, forgot it was an interest-only loan. Disregard the above.

Just hold out, your fine. You are only paying a net $1600 for $410K worth of property that has probably slowed it's decline. You also get to write off the losses. You may be ahead in 4 years when the I/O resets (when all the people with REALLY rediculous payments need an affordable place after they lose their homes). Those home prices are not out of line with average income levels, so a realitively large number of middle class people can still qualify for them. Plant a bunch of trees - they should improve the value in a few years. You have 4 years to offset any gains you make in other areas (like capital gains which will probably be taxed at a higher rate soon).

Houses in the area were gaining in value at an alarming rate with what appeared to be no end in sight.

if you can pay the differences between the rent and mortgage i would try and stick with it for another year. if not attempt a short sale and get out of the rentals. with negative cash flow per month you are not getting "rich" from these properties.

Greetings pjn6,

You haven't said anything that I noted about your own residence.

You own a home, I assume.

Remortgage-able, to free up some cash, if you need some (and when)??

As for lifestyle ... no expenses for life or property that aren't **absolutely** necessary for an extended period!

Eat turnips, potatoes, beans. Meat only on special occasions: too expensive for routine use!

Do you have a bread-maker? Get one! I figured for a time that I should get one ... found one at a yard sale, lady asked how much I offer, while I was mulling over whether I should offer $20. ... or was $10. too niggardly ... she said, "How about $7.50?" I accepted. A great variety of stuff can be included in bread ... and you'll make more saving on the exotic stuff: it's even more cheap than those kinds of fancy breads in the store. Ask for recipes on the Kitchen Table on THS Gardenweb.

Bike to work.

If you have a Thermos now, haul coffee to work ... lacking a Thermos, don't buy one: drink cold coffee, brought from home: don't buy any, out. As a matter of fact, since coffee has no nutritional value ... cut it out.

Cigarettes? Forget that!

Home phone with bells and whistles? No - basic service only.

Cell phone? Only if *essential* for work (in which case ... work should pay for it). If boss expects you to be on call after hours ... are you compensated?

Cable TV? Non-essential frill.

Entertainment outside? Forget that ... you can't afford it.

Parties? Invite good, frugal friends over for conversation. You can learn a lot of good stuff, that way.
Minimal costs for food ... no alcohlic drink: too expensive.

Educational stuff (including movies) at the library.

Vacation? You're kidding! Forget that, too

If you have a kid... disposable diapers? Forget them - cloth diapers may mean the difference between allowing you to keep both of those homes ... or flushing at least one of them down the drain. Use a spatula to flush the baby's residue down the drain instead. So you consider that residue a four-letter word? So it is ... but if you were a farmer, you'd be getting right close to a lot of it ... and you'd survive it.

As for cloth diapers ... buy them from the store only as a last resort.

Shop at yard sales.

Write down names, phone, email of all of the people that you've known since you were a kid. Send out message over that network saying that you need some cloth diapers (or whatever) ... anyone know where you can find some?

Use that database for other stuff that you need, as well.

As you cruise the streets before garbage day ... keep yur eyes open for stuff that you need.

Talk to some 80-year-olds in the residential homes about how to get by on less.

If you want to keep those homes.

My daughter, after hearing Dad's recent suggestion (repeatedly) that she sit on her hands (and her money) for a while ...

... bought a home a couple? of months ago, in/near Phoenix ...

... saying, "Maybe you'll soon be saying, 'I told you so, Dad'". She has sufficient back-up: her only issue is whether she could have bought cheaper, later.

She loaded the moving van in a suburb of Toronto ... yesterday.

I'm not big on the "I told you so" game - it's each person's responsibility to live his/her own life. She's capable of managing her own effectively.

And we need be able to deal with such consequences as may ensue. It's a good idea to have various contingencies covered, as well. Sometimes having neglected to do so ... can get messy.

Good wishes for success in covering all of the necessary bases over the next few years.

It won't be easy.

I hope that you can do it.

North Americans have some major lessons coming about tough times, I think. Those who've changed from being big creditors and exporters to being big debtors and importers need to face the reality of their changed existence.

ole joyful

Thank you for all the replies so far. Keep 'em coming.
This "second home" thing was supposed to be a fairly safe investment for my retirement some day. I keep going like this and I'll be working forever. I like the advice about the shoelaces and belt!;-)
Stinkbone, I keep telling myself the same thing.

Hello again pjn6,

Sorry if I was rather harsh earlier...

... but I'll bet that, over the next few years, if you have some extra money on hand, on occasion, you'll be glad of and thankful for every dollar of it.

It might avoid foreclosure ... and if that eventuality appears possible, I think it wise to consider selling it yourself, for foreclosure may well develop a number of ancillary costs that'll eat up even more of the value of the asset.

If, after all of the costs, it sells for less than you owe, I'll expect them to come after you for the difference, unless you have some local, state or federal rules to forestall that.

Which I doubt, for they've been adding more restrictions to the bankruptcy options recently, and don't forget that the financial people have large lobbies in Washington.

For various reasons ... none of them that I know of to benefit the consumer/borrower.

Good wishes for coming out of this mess smelling like a rose (even after having dealt with cloth diapers ... it can be done).

ole joyful