My rule of thumb for properties in the Inland Empire of Southern California is that properties 1-30 days on the market will see no more that a 3% reduction - enough to cover buyer closing costs. 30-90 DOM will see a monthly price reduction and maybe 5%- to 8% tops.

Obama has proven by all accounts to have to unify the world, but with the expected reduction in fed fund rate to zero percent, to the ongoing War in Iraq (that's already cost 2 trillion) and Afganistan, to the bailout and federal takeover of banks and private institutions (not to mention a stumulus package not yet approriated) that is expected to cost another 1-2 trillion(in the next 1-4 yrs), and let us not forget rising unemployment.

i did not read all the responses - it's late, but great question.simple answer for me:risk reduction/eliminationhow?

Now, because of the reduction in risk you also will incur a reduction in "potential" profit.  

Price reductions used to be 10% but now I am seeing 6% .  

If one could build offsite and drop it in place, there could probably be a further 20% reduction in cost and time. 

I was able to secure a 80% LTV loan and was originally quoted 5.5% interest but asked for a interest rste reduction in return for a business banking relationship.

Just make sure you involve the servicer before you write that big balance reduction check, to ensure you actually get the recast.

So maybe breaking even is not a bad thing if in 20-25 yrs the properties are purely positive cashflow due to principal reduction. 

If you remove it you have to agree with them to a rent reduction.