Need advise what to do for my out-of-state rental property

[Thomas Lam]

Hello to all BF members, I have a rental property in Germantown, MD which my wife bought back in 2005....... I believe some of you know where this is going...... and yes the property is under water! She bought it for $340 and now it only worth around $260. She financed with an 80/20 ARM loan and was up 2yrs ago, but luckily interest rate staying low so we manage to have low enough mortgage.

We have been fortunate enough to have a tenant in there since 2013 and currently have a 2yrs lease but the property never generated any cash flow, so we are thinking about short sell the property.

Several questions I have regarding this property and seeking for advise from anyone here in the forum:

1.What are some options we have for the property? Hold? Short Sell it?

2.Are they any way we able to refinance or modify the loan to a fix 30yrs without come up with any money?

3.If we do have to short sell it. What will be the process? I have never done short sell property so have no experience of it.

Any suggestion and advise I would be much appreciated. Thanks everyone!!