Contact a couple contractors to see what the cost would be to add the addition.

Contractors stated that he does surface level cosmetic fixes as fast as possible to pass inspections.

Maybe a contractor whose income varies. 

I'm thinking that repairing the plumbing leaks and getting the soil dried out could be a permanent solution.   

However, exploring out of state markets could offer stronger cash flow upfront, so it’s worth evaluating both paths.A piece of advice would be to focus on building your core 4  team: agent, lender, contractor, and property manager.

Yes, the contractors were bad people, but there were hundreds of red flags waving in your face and you ignored them all. 

Take your inspection checklist and have the contractor complete the work he's already been paid for, make that part of the mediation.2.

For now, staying local allows me to leverage my property management experience—most of which came from working directly for family and close business associates who were property managers, contractors, and business owners.

Research contractors better Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Quote from @Sam Brock: I'm a contractor and currently building two houses on two lots that I own outright.