Evaluating When to Sell Poor Producing REI

[Frank Mancuso]

Hi Folks - 

They say failure is a great teacher, and I can say I am learning a lot.  

We have a duplex that we rent annually at the jersey shore that we purchased in 2009 for what we thought was a great deal.  We didn't run any numbers, it just seemed to work (mistake #1).  The first couple of years were ok, and we were banking on a rebound and good appreciation (mistake #2).  Well, then hurricane Sandy came and wiped out a lot of the island leaving many houses abandoned once the owners got their insurance check.  This drove down prices even more.  As a result, we had some damage and did renovations on each unit, so we have much more into the property than it's worth.  Now we sit with negative cash flow, and a mortgage balance that is just about what the place is worth.  The only good news is my family is somewhat house-hacking (if you can call it that) and using one unit as a weekend getaway.  

So, my question to all you seasoned and non-seasoned investors out there, how do you evaluate poor performance?  And at the first sign, do you cut bait or hang on for the equity buildup?  Or are there other options?  

Thanks for the advice -- and apologies if this is in the wrong section.