When I run my numbers on the actual income and expenses on an SFH, I make sure I account for the increased taxes that are going to occur after purchase, you can call the tax assessor for that property to check or go to the county's website.

But it increased the value of my home by about $150-$200k and I didn’t pay a dime out of pocket for any of the construction.

If the property contains a residential structure, you can make repairs and redemption will include the amount you increased the value of the property with your repairs.

You'll lose your money to turn over, repairs, and increase your risk of getting taking advantage of.

In this case, the deposit was increased to $400k which would have been the down payment to the Seller anyway.

Either the amount of renovation won't increase the after renovation value or sellers are asking fair market price without any room to negotiate.

So, I am thinking of couple of strategies.1) To sell and reinvest in other properties, i will have to do a 1031 exchange since it has been about 5 years since it has been my primary residence.2) continue to rent it out and wait for value to increase further.

If the values had increased they might not have needed the second.

Even if market values only increase with the value of inflation (2% compounding), a $185k property should net a $40k gain.I suspect that 25% vacancy is right about break-even for them, assuming the same 8% CapEx and 12% Maintenance and Management costs I used in the other models. 

The below chart shows ALL 20 cities increasing for Nov'17, year over year.