My personal opinion (not a legal one) that you did not suffer a real loss.You need to sell the place, and the property now probably worth more because of those improvements you made and may be will even sell faster!

If it didn't balance out in my favor I wouldn't be in this business.I take risks, and suffer stress and headaches, and in return reap a reward.  

I'll just comment that the area suffers from blight and is already congested.

It is NOT just an 8% property management fee either, it is familiarity with the market, being able to locate deals, being able to manage renovations, not getting ripped off on repair costs,being able to verify that everything is running as it should be & being able to quickly diagnose/fix when it isn't, not suffering from high turn over from poor tenant screening & management, not spending a fortune on airfare to fix issues, and generally not being 100% reliant on others who may or may not have your best interests at heart to make the investment work.On the other hand, if you study things this way and compare multiple markets, you will see that places that have inexpensive property and high initial cash flow do NOT have high appreciation.

While I think nightly rates may go down during a recession, I don't anticipate a crippling hit, for a couple of reasons - 1) these drive-able destinations are going to suffer less than destinations that require flying, and 2) luxury properties will be the first to feel the hit, because those luxury travelers will start looking for mid-range properties instead.  

If the market completely disintegrated from deflation, inflation, flu, war, drought.... we will be the small players suffering much less than everyone else.Frank

.  :-)  Remember it's the first of many and most of us suffer thru our first ones.  

Just about every RE investor suffered during those times on some level, and those who's loans were called were at serious risk.

It'd be VERY hard to suffer any real injuries, but people are people. 

Start by attending your local REI meetups.I would also suggest that you sit down with your wife for an hour or two and write down your goals, why they are important and how will you suffer if you don't try to reach those goals.