When is it good to take a loss?

[Nathaniel Hovsepian]

I have recently come to the conclusion that I need to sell a property that is too much work for me at the moment for a loss. I purchased the home for $26k and put another $6k into it.

I took the drywall off to replace it and found that all of the studs were termite infested and need to be replaced. It was at this point that I realized I might have bitten off more than I could chew and would end up just hoping to break even after rehab. 

I know that there is still room to make a profit if all goes well, but don't think it has enough upside to be worth me sinking another $60k into it, and not have anything left over for other investing in the meantime.

Knowing how much work there is left to do (like $60k), and having an ARV of about $105K I am listing it for what I purchased it at, and taking the loss on the extra I put into it.

I am curious to hear your insights about times when you had to deal with a loss, and how you dealt with it.