It could appreciate but I consider that gambling.

These are great for weekend visitors from New Orleans and Florida who come here to gamble (12 casinos).  

I have even heard that banks are holding on to their foreclosures now for the market is back on the rise and they are banking on the fact that they will get much more money next year .. quite a gamble if it's true .. you never know what might happen once our new president takes office ..

That said, would it be in our interest to try to amend the lease with option agreement with the tenant to a subject form to prevent foreclosure and the gamble with the short sale?

Walk away there is nothing worth taking the gamble to hold on to.Reality is you should not have bought in the first place and now if you hold you are likely only going to lose more. 

It's a gamble if values increase much from now until then, but since you have until 2026 to sell for the 121 exclusion, I'd take the gamble that values may pop a bit in a year or so...That's my crystal ball perspective and it may be incorrect, but as market sentiment improves in 12-18 months I think you may get some decent additional gain out of the transaction by holding off a bit. 

Do they have uncontrollable kids.

There's always Gold River if you like gambling.

I agree that it's better to not gamble on a house that doesn't have a positive cash flow.But---- there is the train of thought out there that if you break even every month & just maintain, then someone else is paying your mortgage down for you.

She’s poor, probably not from gambling it all away as some jerk insinuated, and she probably didn’t play the lottery 10 billion times either!