From a selling standpoint there are 2 big concerns:1. disclose - you know there is an unpermitted room and/or any other problems (you said something about electricial).  2. the buyers loan/lender. 

Now that I am a Realtor in Colorado, I am also required to disclose that on my listings as well that I have an ownership stake in a property in the advertisements.I also have not really seen a difference with the tenant's treatment of me as the property manager vs being the owner except one time a tenant did try to pressure me into paying for a silly upgrade saying that as the owner and I could afford it and the $100 month rent increase should pay for the new ceiling [The upgrade was to re-texture the whole ceiling of a 1000 sq foot apartment because it had swirls and minor hairline cracks (built in 1920) and this tenant did not like the swirls -- changing the swirls would cost thousands and not result in any more rent]

I had failed to disclose that I have done it all in majority of my renovations.

Did he disclose this issue?  

Your inspection contingency covers you for problems not disclosed or discovered after inspection. 

I'll tell you that, if you're in banking, you will likely need to disclose any outside business you are involved in and get it approved. 

If your wife is also gifting, you can transfer up to 60,000 a year before needing to disclose. 

Even if you repair the foundation, you will have to disclose it to the end buyer, which can scare them away or reduce the value.

I'd be leery of the advice of one poster about renting it out, especially if its in default, unless you fully disclose it's in default to the potential new tenant.

Since you didn't disclose these issues -- you probably didn't know about them either!