I also have found that they currently have the house up for sale on the MLS for $188,000, reduced in price twice since Aug 2013.

Crime is on the move.

I am thinking to at least reduce the monthly lease payment to $600/m (fair market price) with no money going toward balance.

You have to think about a bunch of things - tenant quality, number of foreclosures, the obvious crime rate, resale, maintenance, etc.

Most banks are so stupid they will believe anything anyone tells them, and if they fall for that where is the crime.

Let's use $2K/month as an example.2,000/month x 12 payments/year = 24,000/yearBi-weekly at the same rate would need to be reduced to = 24,000/year.24,000/26 payments = $923 per payment$923 x 2 = $1846 which is going to be short $154 of what is due, not to mention the payment to the bank is due on the 1st, not randomly throughout the year.

This will be a nice house when I'm done, but this is a poor (low crime) neighborhood.

As I understand it, if you have not reached full retirement age, 66, your social security benefit will be reduced if you exceed a certain earned income.

I'm still going to keep my eyes open in So Cal for the 1% chance that something does come up but I've shifted my attention and research to finding a market that make sense based on crime rates, unemployment rates, job growth, etc.Your rule #7 makes common sense but I hadn't though about incorporating that into my overall strategy.

Can you pay out of pocket at reduced expenses to fix it up?