As the Landlord, I'd suggest you look at the market, absorption rates, rental rates, and quality of tenant, to help you make the decision.I just had a month-to-month tenant that moved out because of health considerations.

This is our first multi-family deal and our first tenant absorption.

If it absolutely needs a new roof that is a big expense usually.If you say the ARV is about 135000, then the numbers would seem more like (135,000 x .70 ) - 10,000 or 94,500 - roof estimate of 10,000 so something more like 85K.This is nothing more than from the reading and knowledge absorption, not from experience or any knowledge of your area.

Absorption rate.What is the quality of income, Paying on time?

@Chris Wilson Regarding your last question about price changes due to negative absorption rates, I don't think there is a simple answer.

Lender will want to see draw schedule,blue prints,track record of rehabbing,and absorption rent up schedule time line.

I would be watching absorption rates on the new construction. 

Ask some local commercial agents what the absorption rate is, and how long it would take them to fill the space should it become vacant.

Numbers including new units per year, absorption, net migration flows, vacancy rates, and rents.

.- Absorption rate.