Plus this may diminish your desire to correct the issues causing this building not to perform.I would use this experience to learn how to better analyze a property before making your next purchase. $50/door isn't the end of the world, considering most people try to get $100 per door on small multis, so your half way there.Analyze every expense and see if you can save any money anywhere.

Also, owning MFH diminishes the variance in vacancies.

I have found diminishing returns sending too often to certain cold lists, like absentee owners.

You let one hour pass, the likely hood of that person being a buyer for you rapidly diminishes.  

if so then it could be justifiable. but if your upgrades are above what your area can support you might be pricing yourself out of your market. at some point you'll trigger the law of diminishing returns. only you can no where that line is based on research of your market.

And over time your ability to get the income tax-free will diminish.

Make a reasonable argument for the diminished value of the property if the neighbor successfully builds the new structure.  

Your ROI on your time was very heavily diminished.

Without sealing the air penetrations from conditioned to unconditioned space, the insulation R value will be strongly diminished and the dust, draftiness, high utility bills, etc will continue. 

You have to be prepared to offer terms that will attract that capital even if it means a diminished return for you in the short term.