It may indicate that the seller is a "churner" who sells property for the down payments, accepts payments over a term and then declares default and takes the property back.

He declared it fraud, fraud, bcs he did not understand it.

Or, the judge may declare the whole deal invalid.Not to mention, the lender can come after you for fraud because you signed a statement saying the sellers were receiving no benefit.In a short sale, sellers leave or you walk away.

There are ways to declare insolvency with the IRS to avoid that bill, which is where the personal financial situation comes into play.Seems unlikely this will ever turn profitable given how far underwater it is.

Then wait for the week to run out before putting it up for rent.I had the same thing happen to my property in Albuquerque, NM and it was no problem to declare the place abandoned and took it over. 

I am a Financial Analyst and have the skills to manage the finances as well as do forward looking analysis to evaluate the financial impact of the association's decisions.After getting the hang of the book keeping items, collecting fees, blah blah....I began to (per advice received on BP) get comfy with the declarations and by laws and making sure we are compliant with the governing body of documents.That is where I ended up on the phone with the insurance agent. 

What might be better is go it for the first house and get large insurance policy for protection.Note:  Please check with the Wife's company because I ran into something like this and they actually required me to divest stocks and on a quarterly interval declare any actions.

@Shaun Reilly is right in that there isn't much inventory in those areas.There is also the fact that the rising prices have attracted developers who can muscle out the individual buyer.

In my mind that isn't even a logical question.Now, about cash flow...I don't believe I made a declarative statement that there was NO cash flow to be had.  

If an optionee is required to do anything to maintain the right to purchase, such as pay rents on time, you don't have an option, you have an installment sale or a sale contract.The heading of a contract at the top margin does not define what type of contract you have, you don't just declare you have an option, the intent of the contract and the terms will define what you have.The intent of a sale is spelled out in the Tax Code with the IRS, it is based on international accounting requirements, look up asset recognition of real estate options.The IRS is not some lonesome dove, all agencies under the Executive and Judicial Branches work in concert, in other words, if the IRS determines requirements all agencies and courts will utilize the same requirements to make their determinations.These "intent" rules go into effect this year, 2016.