If construction is booming and they are working on larger jobs then it will be very hard to find affordable good quality contractors at good prices.

Have them send you pictures of the issue immediately and there are VERY Good Foundation companies and GUYS here that would look out for you to make sure you get a good estimate ans quality work. 

Matt Rosas no we don't...we're a quality cleaners, not a laundry.

Such properties often turn investors with good intentions into slumlords, cutting costs increases profits but later on it can cost you in various ways, city officials, legal issues, insurance can go up, quality of tenants goes down, a property can become a liability.

I'm a PM by trade, and know their skillets and quality range greatly.

I think your rents are optimistic and you will pay with higher vacancy and poorer tenant quality (trashed units) unless you are in a more desirable area.I think a bigger question for yourself is do you want to deal with the type of tenants that come with this property and this area?

If elementary school quality is a consideration, focus on Ditto, with Little Road being a solid alternative. 

Getting a good tenant reminds me of a term we use for buying high quality tools: "pay for quality and you only cry once; buy cheap and you'll cry a lot."  

Raising the rent is the wise choice, I would personally go to $800 if that is what the going rate is, however, you may choose to go to $750 to match the other unit (if comparable quality).

The quality of the neighborhood should give you an idea about what the cap rate should be, although I would aim for over 10 either way.