Hopefully, at the end of this journey I will view this problem as more of an opportunity, as I am sure there are plenty of other cigarette smoke-filled homes waiting to be restored. 

Then I donate the toilet to the local Habitat for Humanity Restore for a tax credit.  

You might also qualify for the de minimis one that you mention since it is line item amounts 2,500 or less.I don't see this as strict adaptation, and nor would it be betterment or restoration.

However, lately, I've been researching co-living and short-term rentals, and I believe the property would be more attractive with a restored pool.

There are ways to conduct a one-time restoration of benefits, or to restore benefits, but those require you to refinance the existing mortgage into a conventional loan, or no longer own the home, so they probably aren't worth it with your current scenario. 

They have redemption rights, which would restore title to the owner and the liens would re-attach.2. 

:nono: However, fixing something just to restore it to it's former state sounds ok.

And dun the security deposit for the amount that it cost to restore it.

(My current builders risk policy with NREIG doesn't cover ANY water damage at all, but we have a fire & water restoration business too, so I can handle that).We all know this already, but there's no free lunches in this world.

Here are a few examples: - $184 million dollar Amphitheater venue - $70 million dollar Grand Rapids Public Museum expansion - $55 million dollar River Trail enhancements - $40 million dollar riverfront restoration - $80 million dollar Corewell Health site - $175 million dollar Soccer Stadium