I can’t answer specifics about your property, but not surprised you are seeing a steep rise.

At this point, I see only 3 options1) assign the contract to someone else, meaning sell the apartment (but I will need approval from the developer)2) talk to the developer and ask for a minimum one-week rental (Min City Regulation) at least for the 1st year to get over the bad time.3) to just go ahead and purchase the apartment and suck up any loss I might make and try to get in refinanced as soon as possible with a lower interest rate.What are your thoughts?

After that experience - of renovating and building new simultaneously - it became highly evident to me that new construction was the way to go.

I've done some localized studies and the numbers of owner occupied buyers versus investor buyers in several of my current markets are 10 to1 ratio and as high as 25 to 1. 

price $124k it’s in a resort, highly sought after especially in summer season.

It's highly unlikely, if not impossible, to find a traditional lending source to fund the purchase of tax deed property. 

I’m seeing that property crime is pretty high and since I’m an out of state investor, I would have a hard time keeping an eye on the ground besides cleaners/handymen between stays. 

As tenants have left we've been fixing up the apartments so that everything is working and is freshly painted and clean again.

Exterior/Interior Paint, fixtures, etc.These buildings were constructed in the 1960s with steel pipes and much of the plumbing has been replaced as needed including new supply lines in the ground and new sewer pipes under the slabs.Ongoing maintenance costs have been pretty consistently high on this project, but the rise in rent over the holding time has been a saving grace.

It's a great community to be a part of.