moral of the story, banks are stupid and often times unrealistic, and this is coming from someone who used to work for fannie mae. fortunately i met a contractor who sometimes does work for banks stabilizing vacants and he'll send them pictures and estimates and let them know how bad of condition the house really is. once they realize that it'll never sell at their price and that further deterioration decreases their odds of getting it sold. they come to their senses.

Paint that is chipped or deteriorating it can cause serious health hazards.

He's probably glad to see your there fixing up the house, instead of it deteriorating.

Further, even if I was a star applicant to a small bank, some still could not make these loans since their equity base was unstable or deteriorating and the FDIC was performing a colonoscopy on them every other day.

Not to mention the mechanicals are likely shot, and there is probably deterioration of the exterior barriers as well (siding, roof, soffit/fascia, etc).- While $30-40K seems like it *could* be enough to get the property into rental condition (we've done gut rehabs for this), it begs the question why it's been sitting for 6 years and nobody else has picked it up in that time.

Slumlords overcharge for property in poor neighborhoods that is kept in poor repair and allowed to deteriorate.

Is it going to deteriorate the concrete slightly faster, possibly, but you are not looking at imminent failure from what I can see in the picture, and likely will not effect resale in the slightest.Beyond that, you can try to lift it, cut out the trouble spot and re-pour, asphalt over, or completely remove and repour. 

Let's say it outlast the current tenant, and the next tenant stores crap in there - are you going to fix it when the structure deteriorates?

What blew my mind was the amount of deterioration salt water causes.  

Most times these homes are not being maintained and deteriorate during that time.