Advice Please - Sell, Refi, other? Negative cashflow on rental

[Giovanni Puglisi]

My wife and I purchased a single family (manufactured)home on 30 acres in 2007 for $300,000 with $60,000 down as our primary residence. We lived in it for 3 years until I made an offer on a short sale property that my wife loved. Long story short, I kept the old house and decided to rent it because I had some attachment to it and misjudged the future market. The rent has gone from $1,700/mo to the current $1,100/mo.

Estimated Market Value = $260,000

Current Loan Balance = $208,000

Current Rent = $1,100

Yearly NOI = ~ $6,000 (Rent - PITI )

Current Mort Pay (PMT)= $1521.00

Yearly Net = - $5,150 (negative cash flow per year)

Now – I’ve been fairly lucky in damages – BUT I haven’t been budgeting for major replacement expenses such as a roof, carpeting, appliances, HVAC, etc. I plan on doing any and all repairs/maint. myself.

OPTION 1 – Refi if possibile – Currently at 6% - But my wife says that since it’s not our primary residence, and it’s a manufactured home, we’ll be unable to do so.

OPTION 2 - Put on market and hopefully sell at market value = $260,000 (minus commission and mortgage, and closing costs). Walk away with approx. $35,000 – Losing about $25,000 of our original down payment.

Anybody see an Option 3?

I’d probably have to put ~$5,000 into the house to “clean” it up for salable condition. Also, this type of property will take some time to sell I’d assume, so carrying that mortgage for up to 6 months is not optimal.

We have other properties(commercial) as well as a business (car wash) that remain positive cash flowing/profitable.