Probably approaching $100k in total.My options seem to be sell and pay an additional ~70k out of pocket to the lender (underwater amount) or make the repairs and hope the problem is corrected once and for all.

I recommend you do an online demo to see the features that it offers.

Number wise it does not look bad but this is with such limited information I would not go off of an opinion based on info provided. 

@Jimmy O'Connor time for an update!

Also if the property is zoned such that commercial can be there, you've got more options for an eventual redevelopment in my mind. 

She went from having an affordable place to suddenly facing thousands of dollars in unexpected fees.

I have an off market opportunity for a 3 plex that I’m looking at.

The Colorado Springs property is a operating Airbnb that has been updated and has been generating an average of $5500-7500 per month.

I have used DSCR loans to get 14 other properties and an additional two under contract so I've always been able to find the 20% but I am stuck at the moment. 

So if you have more than a $786k NET GAIN (not cash, not equity, GAIN) you’ll be able to take the full $500k tax free and then do an exchange on the remainder. 3) For that exchange to work you’ll have to buy an investment, not primary home that costs more than the remaining sales price, and reinvest all the “cash” beyond that $500k.