BiggerPockets

Ive tried to summarize this to make it not such a long read.

2006
I Bought my house at auction for $180k In a Chicago suburb 3br 2.5bth 1900 sq ft raised ranch.
Put in $30k completely remodeled the inside.
2007
Girlfriend gets pregnant. We move into her house (better schools, closer to family, etc.)
Refinanced my house interest only for $211k pulling the remodeling money with the intent to sell. The appraisal value $254k and put the house on the market for $245…$235…$225…..$215. No one even looks at the house and the value is falling. The bubble had burst.
My wife (now) will be out of work for a few months with newborn. Guess what business she is in,..... Mortgages. Her business goes to crap and she can't find a good paying job. I start paying all the bills.
So I put renters in the house for $1500 / month Mortgage payment $1800. Figured I would ride out the storm.
2010
Renters get a job relocation and move out. Trying to find new renters is not going well. I'm already down to $1300 for rent with no takers. (flooded market?) I really can't afford to pay for the house we live in and $500 a month for the other house too. Since its interest only I'm just throwing money away and not making any head way. I tried to refinance but the value was to low $152K according to the chase appraisal so they wouldn't do the refinance. (Funny since they have the loan already and it would reduce their risk).
So I'm stuck. I can't make the payment this month without renters. And even if I put renters in I really can't afford to put out the extra $500 a month + any maintenance. I can't refinance according to chase. What should I do?

I thought about owner financing but since the loan is interest only even if I get someone to pay I wouldn't be making any headway. But I will read the post thoroughly and see if I can find a way to make it work.

Sorry you're in this situation. You're in a tough spot with no good alternatives. It appears you cannot sell it for enough to pay off the existing loan. Nor can you rent it for enough to even cover the mortgage let alone actually be break even. I'm guessing you don't have a big wad of cash to bring to closing,

Have you spoken to the lender about doing a loan modification? Seems like a long shot, since those seem like long shots under the best of circumstances.

Short sale? There must be some price that will bring a buyer. Will the bank accept this price for a short sale?

Walk away? More of a hit than a short sale. Always an option, though.

Will the sale of that good looking car in your avatar provide enough cash to cover negative cashflow for a while? Better yet, throw the car in with the sale of the house.........Buy my house, get a free car !!!!!!

Unfortunately, if that car has a significant value, it may well interfere with your ability to negotiate a short sale. If you can't afford a home, can show a hardship (like your wife getting laid off), and don't have any assets, the lender may be cooperative on a short sale. If you do have assets, it will be tougher. In any case, discussing your options with the lender would be a good idea.