I have three rentals and one of them is not making money - can I do a short sale?

The short sale is not meant to be an easy way out for someone in this situation. There are so many foreclosures right now and lenders want to make sure that people are not just walking away from a property.

We get calls from investors all the time asking about short sales because their rentals are not making a profit and they can’t sell them for what their worth.

The short sale is not for this purpose and we firmly believe that this kind of thinking is what has gotten us into so much trouble in the first place.

If you are breaking even with the property in question you must consider the benefits of keeping it (tax benefits and future appreciation). If you have a negative cash flow from the property just use any profits from the other two rentals to offset the loss until things get better.

Of course you can stop paying and your lender will foreclose, but if you consider yourself an investor and plan to finance anything else in the near future (including a personal residence), you better give this some serious thought.