Horror Story PLEASE help with advice if you can

[Chuck Margarites]

I'm new to posting, but have lurked for over a year or more now. I'm pretty well read on real estate and have followed the podcasts for over a year now as well, "real estate guys", "Get Real", etc, however I think I'm way over my head now.

I bought a 4 family for $135k with no money down last year (April) with a credit rating of over 800, which I'm sure is gone by or close by now. The property was rented at $725 per apt for 3 of the apts, and $500 for the 4th. Taxes are 2200 per year, I pay heat and hot water which averages out to $300 per month (according to the utilities dept).

Since I've gotten into this place I've had nothing but nightmares. At closing one of the tenants up and left and trashed the place costing me about 5k to fix, the former owner moved someone else in and they didn't pay rent and it took me 5 months to get them out, kept citing me by calling board of health and wouldn't pay, so I'm in the hole already by 8k that I didn't expect. Then a tenant that was long term (17 years) died in the house, he had a conservator who refused to clean the place out or pay his last month, so I had to have his place cleaned out at a cost of somewhere around 2k, and his place was renovated down to the sheetrock due to damage and disrepair over the past 17 years (3k). Another tenant moved in and moved out breaking the lease, and the last two tenants to move in have moved out due to hardships. And to top things off the electric needed updating to keep it insured at a price of 6500.

My initial plan was to put a roof on which I did 20k, windows 6k, siding 6k, and some minor renovations 10k. I figured the ARV to be somewhere around 240k, so it looked like a good deal. I took out a loan at 9.4% due to all of the rehab the place needed, with expectation that I would be able to rehab and refi at 7% or so, but with all of the delays, and snafus, I'm way behind, haven't finished the rehab and can't refi. I've yet to have a month where all apts have been full and rents paid. I've lost money every month, all expenses have be underestimated and tenants have been terrible (I screened the ones that I put in very well, but they haven't worked out and the only recourse I've had is to keep the security dep.)

Heres the numbers more clearly.

ARV 240k
Purchase 135k
Roof 26k
Electric 6.5k
Renovation of entries/porches decks (disrepair) 3k
Renovation of trashed apts 8k
Lost Rents 10k

My payments are 1480 for PITI/mo
I have one renter at 500/mo (two renters leaving this month at 725/mo)
Gas/Water/Sewer 1000/mo during the winter

I need to put windows in and put siding on, and the area depreciated to an ARV now of $200, realistically I can probably sell between 170 and 180k ARV right now (the market really took a big hit), but could get an appraisal for 220 to refi to a better payment.

I currently owe 1500 for water/sewer (behind)
I also owe 2800 for updated electric
I also owe 800 for dumpsters used for renovations
Gas is behind at 900
I've been late on the mortgage payment two months in a row (but still current)

Lastly the Board of Health was in last week and tells me that I need to put the windows in within 7 days of receipt of notice, I need two doors, asbestos abatement in the basement, and general repairs. I'm going to ask for a hearing and see if I can delay them.

I am so lost right now in the middle of this that I want to cry, quit and just let the bank foreclose. I dont' know what else to do. I've listed the property on craigslist and have the vacancies posted there as well.

What else can I do, I know I made a lot of mistakes and am willing to walk on this one and probably REI altogether, I thought I was prepared, but I was totally wrong and have devastated my savings and mental outlook on this whole business of investing.

I'd be willing to take the losses and walk but I need to know what people here think. Short-sale, fire sale for 140k, finish and refi then try to sell or rent? Please Help!!!!! I also own my own home (bought last year, so there isn't really any equity) and need to be sure that it is protected, any advice would help.

Thank you for taking the time.

Chuck