There is a lot of bad information out there so always make sure you get the best info you can. :)

(Doesn't mean they are bad people)Its not my thing,   but that much would buy you a pretty substantial portfolio in other parts of the country.  

Then we can sell it, split the profits (which should be anywhere from $300-$500K depending on how bad this place really is) and I'll take my share of the money and put it down on income producing property that will cover my rent on a new place.

Your plumber has taken a serious problem - bad sewer line - and turned it into a REALLY serious problem - foundation issues. 

You can slow down or stop investing, which isn't a bad strategy in the short term if you don't see deals that make sense for you.

Most of the houses i sold that were not really performing as rentals were in this range, so i have a bad history with rentals in this price range. 

Or a handrail fails and a kid falls and busts his head open on stairway ice because your PM knows nothing about how concrete should be finished and let a bad fix slip?

Is this a bad place to start?

I figure this is a bad solution since the tree will continue to cause issues.Has anyone else ever ran into an issue like this in the past? 

A $50K value add is not a bad return against a 80% LTV financed buy n hold.