You could have an 8% CAP rate property that loses money if your financing terms are bad or down payment is low.

The properties cash flowed about $1k per month.Last year, which is 14 years later from his purchases in 2004, he had to move out of his apt because his rent is now over $4k from his original $2k per month.His CT Properties cash flowed the same for the last 14 years, about $1k per month.BUT... if you considered that his rent moved up another $2k more in rent, the over all effect is that he was losing money.He is also effectively priced out of NYC and moved to a lower cost area in NJ.

To avoid losing their credit rating they signed the property back deed-in-lieu-of. 

Also, in a mainstream asset class like value-added multifamily, I see no reason to take a risk on a sponsor that doesn't have full real estate cycle experience and didn't lose money.

Consider you could lose the deal.

To me, a relationship where both parties have something to lose is more likely to be successful for both sides.

My initial thoughts are to use the $30k to knock down the debt to $10k as the much higher interest I pay on the debt means I’m losing money each month, and start again saving from scratch.

I just don't see a situation where I don't lose one way or another.

The point is this... if you home sits on the market for 60 days instead of 14, you're losing almost 2 months of rent.

If there's cash flow, can I really lose?