If the business does not meet your metrics with financing in-place than something has to change: acquisition & make ready costs; purchase price; or revenue.   

You don't want to "discriminate" based on familial status, and the sq ft never changes and can't be argued. 

This will affect your own IRR and return on your cash, but it should not change the value of the property.

. $ Creative way to get a hard to sell house SOLD FAST!

If your standards change based on the applicant you are opening yourself up to a potential lawsuit.

@Marshall Hooper Doesn't change my statement.

If he is disclosing the roof was bad - and you already knew that - your position does not change much.  

simply look were you live in Milwaukee.. and look at all those great 30's and 40s houses on the north side of town you can buy for under 100k but it would cost 400k to rebuild them.. in those areas building new just wont happen until things change demographically and if it does not pencil for you doubt you can sell it to any one else.. so the smaller project maybe what you do.. then at some point in the future where economics catch's up.. you demo the small improvements and go vertical.

All damage from a Category 4 Hurricane has been mitigated - wow that was fast, almost biblical speed - you must have had Jesus, Moses and Noah (or the almighty) on speed dial for that one. 

You can also see changes in pop growth, house prices, and median income since 2000.