How do I handle negative cash flow on a rental?

[Ricardo Suber]

Hey everyone. Brand new to this forum and could use some guidance! I’d like to invest but i need to get out of this hole. I bought my first home in 2005: a 1 bedroom co-op (condo) in upstate New York for 85K. Due to the economy in 2008, the value of my home tanked to 40K. I lost my job in 2011 and eventually went into foreclosure and accumulated debt. (I tried unsuccessfully to gain employment in that area for 4 years and decided to move out of state). In 2015 I rented an apartment out of state and was able to replace my income, thus saving my vacant NY home from foreclosure. Today I have a tenant in this unit. However here’s my problem: To save my foreclosure, I had to modify my delinquent loan— and because it’s now a rental and due to my credit and changing rates, my monthly mortgage bill jumped from $480/mo to $880/mo (about 9% interest) and my HOA increased from $400 to $580/mo. ($1460/mo I’m responsible for). I now owe about 120K on the property I bought for 85K that I likely couldn’t sell for more than 40K today. My tenant is currently paying $900/month which is the going rate for a 1 bedroom in that neighborhood. But I’m obviously losing $560 every month. Can anyone relate? More importantly can someone provide some sound guidance on what I can do in this situation? Continue to rent and hope the market improves? Sell at a loss?