If you make this a balloon payment in say 5 years, you've helped your cashflow, and you can refinance to pay out the balance of the 2nd mtg.I do have to ask though - you seem quite emotionally invested at this point - what are average house prices in this neighbourhood?

or maybe I was blinded by being emotionally connected to the deal?

One more tip – people remember stories that trigger their emotions.

Takes a lot of emotion out of the ordeal as well & can veer off script then come back to it in order to sound like a real person. 

One more tip – people remember stories that trigger their emotions.

They are making a decision based on emotions and not always just the facts as you have learned. 

I sold due to emotional triggers.  

@Chris PurcellI'm somebody that likes to keep situations simple, and by letting emotions and how you feel get involved, one can make any situation very complicated.

Yes this is not what you wanted in home ownership, but don't let a tough situation become a disaster.Take emotion out of the decision and point out the areas that my logic is off base.I wish the best for you.

The fact that we did not want to demo the entire home was a big selling point, it was an emotional think and we realized that from the beginning.