Short sale/ DIL/ Foreclosure

[Shawn-Karisa Shaffer]

I still own my first home, that I bought in 2007 with my first wife, just before the bubble burst. It's now an out of state rental property. It's about $300 per month in negative cash flow (split 50/50 with ex wife, $150 a piece). I don't think I can increase rent enough to break even. I owe 205k, it's worth between $135-$165k, depending on who you talk to. In my opinion, if I put another $5k into it, I might be able to sell it for $165-175k. 

Kicker is this: all payments are up to date. It's owned with my ex-wife (both of us wanted to keep our credit), so we kept paying. I would have let it go to foreclosure about 3-4 years ago, but she did not want the credit hit. 

Now that I am trying to expand my RE business, it really puts a damper on my ability to get new loans for properties from most lenders, because they apply the whole debt of this house to my name. Everyone I talk to whether bank/broker/portfolio lenders, they all cringe at this property's numbers.

Any ideas on how to get rid of it?

Thanks in advance...

Shawn