In short, I probably took a 10% haircut. 

People are either not accounting for ALL operating expenses and will take a cash flow haircut due to ignorance or unrealistic optimism or just want to slumlord it, are banking on appreciation, or are buying as a house hack but again are not thinking about the property cash flow on its own down the road when they move out.

Short sales these days are by and large just a waste of time.  7 years ago was a completely different story with banks in a panic, but these days banks are not willing to take the kind of haircut on the loans principle that they were during the housing crisis.

If you roll the portion of the Roth 401(k) to a Roth IRA first you can take out the contributions with no taxes or penalty and not take the ~45-55% haircut on the earnings which will come out tax free at some point.And really...

As a practical matter, if the liens total up to more than the property is worth, it will be tough to do a deal because one or more of the lien holders will have to take a haircut (e.g., a short sale).

So I always try to find ways to deter paying that 20% haircut.  

We took an additional haircut of $200k on principal from $1.9 million (outstanding balance at time) to $1.7 million.

Kinda like asking your barber if you need a haircut.

People don't take a 20% hair cut and sell their home just to buy a bigger house.

Moral of the story:  Define what is a reasonable ROI for yourself, and make sure you factor in a 50 percent haircut on values and rents for a few years.