I'm a small time real estate investor who has ran ...

I would seriously consider selling the properties, even if it was on a "short sale".  This way, your credit will recover much quicker than if you did a BK or foreclosure.  I have a friend who is a real estate investor who is in the same situation you are in and that is exactly what she is doing.  She is almost out of the hole she was in and feels like she is almost able to breathe again.

If you advertise that you will pay all closing costs up to 6% and participate in the down payment assistance if the property would qualify for an FHA loan based off of the sales price/loan amount, you will get more attention to your house and be able to sell it quicker.  You will need to let the lender know you are going to try to sell the house on a short sell if you owe more than it is currently worth or just to try to sell it quicker.  There will be forms you will have to fill out from the lender in order to do this.  Without the lenders permission, you cannot do a short sale.  They will have to approve the sale price and terms of the contract.

Good luck.

Along with David Reed's answer, try talking to the mortgage holder and see if they can schedule smaller payments on a short-term basis.  Avoid foreclosure or bankruptcy at all costs.  Some companies will also accept "deeds in lieu of foreclosure".  Talk to an attorney. Let him consult with the mortgage holder to see if they would allow you to sign the deeds to the properties back over to the mortgage holder to avoid foreclosure.  Some mortgage companies may have an investment property division and can possibly rent the houses out to recoup the loan funds.

if buying a foreclosure what area city, state?  would you recommend? we are aiming towards las vegas, but my wife wants florida? we are looking in the 110 125 range with 30% down and hope to rent for 6-7 years.