If you need to pocket the money rather than set it aside for future expenses, you are undercapitalized and should not have rental property until you can set aside cash.Good businesses do not run by depleting the cash.

We also found we were depleting our savings putting 20% down per SF house, and the market recovery meant that savings from our jobs and rental property cash flow was taking longer than we liked to accumulate to the point we could move on the next, more expensive, SF house.

It's the rare heir or exec that will open a probate in order to deal with a property with no equity.That being said, if the property is held by a trust and you can find a trustee to work with, there might be a play there.In many cases foreclosure is the best way to clean up title and get a property back on the market.

Once you've got past that hurdle you still have any co-owners to deal with.How do you clean up that mess?

It drives most people away but is usually just cosmetic that can be fixed with less cash than you would imagine with some cleanup and OdorX or something similar.

To help clean up my debt-to-income ratio I decided to put my rental property up for sale as well.

As for the reserves, the 60k would not deplete all of my funds but it would eliminate a substantial amount.

If you have carpet you run the risk of urine on it but some sort of plank or hardwood is easy to clean up.

During previous inspections by both us and the section 8 folks he was told to clean up his act. 

While we all know that the value is really in land, the improvements are pretty darned important - trailers get old and crappy way faster, and don't generally clean up as well as a stick-built house.b.