If you are risk adverse real estate, (especially out of state) is not for you.James Wise, Real Estate 

To answer Brian's question, I believe you just want to cut your losses and recover some of your cash and possibly pay back borrowed money.Assuming my hunch is correct, you just claim your losses, and there is no tax issue.If you do have a taxable gain after selling this property, you will not have adverse tax consequences, either.

Also what adversity did you face as you started investing.  

A quick google search says adverse possession in FL takes seven years. 

I have found a property for $295k in a nice neighborhood with an ARV of $385k the seller acquired through adverse possession.

If you are risk adverse real estate, (especially out of state) is not for you.As for horror stories you'll end up involved in those no matter where you invest.

You have to understand how risk-prone or risk adverse you are.

Depending on the results of that, you could look into adverse possession, but the odds are stacked against you there.

@Brant Garner typically I am pretty risk adverse my main concern is that I will be able to finance it conventionaly down the road and sell it to another investor.

I can take payment from (almost) any party who isn't adverse to the client, with the understanding that the client is ultimately responsible.