The bad neighborhood I invested in may kill my investment

[Rodney Lorenzo]

The urge to get into real estate pushed me to invest in a 6 unit building in a neighborhood that I didn't think was that bad. I thought, the cash flow could be good so why not. This was a year ago. Now, my PM is struggling to fill the units from bad tenants that I've had to evict and I can only pay the mortgage out of my own pocket by so much. I'm very worried of defaulting on this property. 

To make matters worse, I have a 5% penalty on the loan if I sell it before 5 years. If I were to sell it, I'd have to not only pay this penalty, but the 6% realtor commission on top of that. What would you do in my case? I'm thinking of selling it off market to avoid the realtor commission and possibly paying someone a 1% finder's fee for bringing me a buyer. I would then pay 6% in total in ridding myself of the property, which is the same amount I would be paying a realtor. 6% is better than 11%. I've learned that bad neighborhoods tend to attract bad tenants, while good attracts good. I may just have to have my PM fill the units with whomever, just to boost the value of the property, which is what the previous owner did, hence, me inheriting his bad tenants. Yes, I'd hate to do this to another investor, but at the end of the day, I don't want to see my first investment go down the toilet. What would you do in my case?