Looks like this is a just a matter of keeping it simple and unloading a non-performer.  

Your construction cost at $175 psf sounds like just a hard cost and is a little low (I'd at least use $180-$185 min at the price point and square footage your'e looking at with lumber prices at a high and steel prices going up etc).   

Not home depot, but a local lumber yard, or a supplier that sells siding, shingles, decking, etc.

I would find another investor and unload the property.

We have discussed the fact that we would buy the supplies (he manages the lumber/ hardware store) and now we are trying to figure out how to break down the labor payments.  

It depends on how motivated the seller is to unload this property.

Chris,I sold distribution lumber in Maltby for lots of years and had lots of good contractors come in that fly under the radar. 

Hey guys, call a local lumber yard and ask for a referral. 

I would unload that property before the tenant trashes it or the market turns and count your blessings that you've escaped the inevitable.If you want to create wealth, work for it.

I just got a call from a bank today looking to have me unload a property for them.