I do not know if the value of that property dropped at all. Nobody was buying at that time. The region population had just dropped a good deal and there was a glut of housing on the market. Realtors advised us to try a short-sale. The mortgage company refused to consider a short-sale.
I gave them the property and they were suing me for the value of the property. At that time I was broke and stressed.
We did not have cash to hire a lawyer, I imagine now that any lawyer would have quashed the law suit quickly. We were very stressed and just wanted it to be over.
Going through a bankruptcy is very stressful. I had never planned on going through one in my life.
If the lay-offs had not happened, or if we had simply stayed living in that property the bankruptcy would have never happened.
Any investment plan that includes a bankruptcy is faulty.
I have certainly made mistakes, with hindsight I know now how I could have avoided those problems. But you only live life once, you dont get to go back for do-overs.
We have owned four Multi-Family-Residences [MFR]. In all four cases, we took out more money from them than how much we put into them.
Our first MFR we bought when we were in college. I had GI-bill paying for college, my wife and I both had F/T jobs making Minimum-Wage. We did not have enough salary income to ever cover a mortgage payment. It was the rental income that carried that mortgage. That was our first house.
We had to make the initial down payment for the escrow account. That first mortgage was a 'first-time homeowner zero-down FHA mortgage'. We had to put like $8,000 into the escrow account.
We lived there without any of our salary income going to service the mortgage, or the property taxes/insurance.
Rinse and repeat, three more times. [though with the three later MFRs I was on Active Duty again and had a better salary income]
By the time that I was nearing retirement, we began selling properties. Putting the profits into the mortgage of one MFR that we had decided to keep to fund us in our retirement.
The day I retired from the Navy, we were down to only one MFR.
If it had depreciated down to $75k and if it had sold for $100k, then there would have been a $25k profit subject to taxes. That is correct. But it did not sell.
I did not pay income taxes on it.
The bank got the property.
Submariners are a different kind of breed. Few people can flourish in that environment, even for 4 years. Very few can survive it for 20 years.
It is hard on marriages.