Gary-I believe you have several workable scenarios given your home's price point and also the fact your only $18K underwater.Since I believe your home may be a good buy and hold candidate.

The deal specifics are always workable.

Joe, you seem to be a thoughtful person and have a real workable plan.

I'm not familiar with their workability, validity with IRS, etc.Does anyone use or know about these?

You can look into a smoke outside only policy, but it is hard to make a leopard change their spots (if they have been smoking inside for years, good luck changing the behavior)...If you want to go no smoking at all,  you could just give notice with month to month or not renew when the lease ends, but the inside smokers can create quite a lot of work on the turnovers so you have all that work now (when closing taps your cash) and an early vacancy plus losing a good payer...Maybe get inside and assess the unit and behavior some and consider if it workable another year or more (who knows they could stay years) or if you need too make a change.

Sounds like you just need to walk down the street to another agent- seems very workable.

@Lamont MarableIf you have $100,000 house that's temperature set on the water that might be workable is the payouts are in town and you could do a 3 to 5 year lease optionRenting it out or doing a short sale are the only options right nowRule of thumb is don't get involved with underwater house is more than 10% of fair market value, and it better be in great condition in a good locationMost of the houses that are this much underwater have some kind of second mortgage or home-equity loan that they used to pay off credit card debt

I have done as much due diligence as possible, using BP tools and had an agent review them, they look workable.  

Offering the option of having one for a few extra $$ a month might be workable though.

If it is interest only, that can be workable.