JD Martin you are right, my guess is they are only out a couple of thousand dollars between EMD and other fees, but for newbies who are just dipping in, the loss is a burn.

First time I tried it, I put my own capital in to fix up house to be reimbursed from seller. 

This means you have 50k of capital gains built into your property. 

If you are a licensed real estate agent and end up selling your own property, do you still get to write-off the real estate commission against your profit/loss on the sale?  

As for the property not selling, unless there is some legal reason you can not sell you need to sell know even if it is at a loss. 

@Jonathan Taylor generally this can resolve by giving lender audited profit & loss worksheet for current year.

I estimate I could get around $225k if I wait around for the right buyer or I could dump it for a bargain price and chalk up the loss to lessons learned.

You didn't say how much capital you have to invest and what your goals are but the more doors under one roof the better!

Or better yet,  gain experience, learning the ropes, by participating in a real deal.I don't come empty handed as I can offer my contracting/estimating/realtor experience, $ capital, and/or fulfill whatever roles are needed.I'm in the Northern Virginia area but willing to participate anywhere in the mid atlantic or south east.Hope to hear from you!

I'm paying tax on the interest because what else can I do since it's reported, if I don't eventually get my principal back it will be a loss I can either write off or carry forward.