Quick update. The agent listed the house a couple of weeks ago; he did a showing and got 15 people to come look at it. No offers, not even a nibble. He lowered the price $10k and did another showing; 4 lookey-loos but nary a nibble. A huge factor was the POS house next door. The realtor wants to lower the price again, but as someone else pointed out, he just wants a quick commission and isn't going to put much if any effort into this endeavor; from his perspective, if the price went all the way down to $100k he doesn't care because he still gets a commission.

We could rent it out again, but it would need a quick cash infusion to fix a few things; the carpet is trashed, there's leaking faucets, etc.

I worked up a spreadsheet which models the current year through the next 10 years. I wonder if it wouldn't be less painful to just walk away from it at this point.

https://docs.google.com/spreadsheet/ccc?key=0AqxyJGkVJoYBdGF5Mnp2WlZCZnQwb1M2Y0VjNG5Ic UE&usp=sharing

Here's the POS house

http://forums.pelicanparts.com/uploa...1383837744.jpg
http://forums.pelicanparts.com/uploa...1383837792.jpg
http://forums.pelicanparts.com/uploa...1383837817.jpg

That was one part of the realtor buying/selling world that really irk'd me. They all say "we're on your side and want the best for you" but when it really comes down to it, they only get ~3% of the sale for commission so what is the big deal to them if you lower the price. They have no problem pushing for a price reduction of $10k or more because that only changes their commission by $300 at most, more likely less after fees, etc.

There is only one person in a real estate transaction that really has your best interest in mind, and that is you.

One more option-

Rent out house, ONLY PAY 1st mortgage, tell 2nd lien to pound sand and just go commando style.

Pursue this method at your own risk. There isnt much they can do except stick your wife in collections, and eventually court order.

Maybe, they will. maybe they won't

Do this at your own risk, check CA law for collection rights against a defaulted HELOC.