@Rick Albert hit the nail on the head with his comment.

And appreciation of property is in large part capital preservation, it is your investment capital being inflation adjusted. 

A company called Asset Preservations bought the Right of Redemption from the foreclosure owner and is now trying to redeem it from us and refused to pay more than 100k during mediation and we have a trial set for July 29th. 

Property taxes are the final nail in the coffin.

Joe, I think you nailed this one.

Thank you @Ned Carey That's all I needed to hear to put the final nail in the coffin.

While a 3.5% return seems low, the buyer profile for this asset was individuals in wealth preservation mode.

Hey particular attention to the age of the roof, the number of roofs nailed down upon other roofs.

Meetings, emails and calls followed where I tried in vain to nail down an estimate of cost.

Our approach for implementation is to break all repairs into 4 categories by priority:1) Health & Safety - most important as could result in tenant lawsuit2) Property Preservation & Government Requirements - don't ignore a roof leak that costs hundreds to fix now, but will costs thousands in the future.