That had to do with quality of lumber.

A friend's mother passed away and he's unloading her rentals.  

The backsplash is 3 x 6 ice blue glass subway from a local tile store.The hardwood flooring is Lumber Liquidators Grey Mist Bamboo (2.00 per sq ft).

I purchased it because price was 60% of market, but now I would like to unload it as market price to my tenant that prefers to pay a mortgage instead of a rent.

Do it until you have to shift focus to acquiring and unloading.  

Now in my book that's the ultimate because a good investment is one where I make money when I buy, I make money cash flowing as I operate, and have multiple exist strategies provided I decide to unload & scale to a larger asset. 

He's been trying to unload the property for the last 7 years, asking around $200k, but it's possible I could get plans and steel as part of the deal because unless someone is going to build the exact same building, it's scrap value. 

Raised lumber, other raised building material cost, short construction labor absolutely increase a new home construction cost.  

They will act only at the last minute and need an ALL CASH buyout to avoid the Sword of Damocles hanging over them.They will attempt a FSBO up to that point and finally cave into a Seller's Agent just to unload.

Personally, I would try to unload it and cut your losses.