DEAR BERNICE: I have two investment properties in Hawaii. I paid $500,000 for them and now they're worth $725,000 ($350,000 and $375,000). I owe about $379,000 on one and $399,000 on the other. The rental income has gone way down (from $6,500 per month to $3,500 per month.) The dues are very high. Do you suggest trying to do a short sale or should I go for a loan modification? --Rich S.
DEAR RICH: To obtain a short sale, you generally have to demonstrate hardship. Since these are both investment properties, it's highly unlikely that you will get a loan modification from a lender. According to the U.S. Department of Housing and Urban Development, less than 3 percent of all applicants are approved for a loan modification.