I might add that it is also in an area that i was not familiar with so I probably over estimated the ARV and over improved even if the market hadn't shifted. 

The best return for each investor depends on what the investor wants to invest in and what their risk profile is.

My  contractor has advised that it would be more cost effective to simply furr out the walls and put up a nice smooth dry wall instead of trying to even out/improve the current situation.

Given the parameters you've identified and the credit profile, we're looking at about 5.25% Mr.

@Elizabeth ColegroveAgreed completely the whole part of me putting the "THINKING" comment in there was becuase they dont like you to think in terms of why are we doing this and how come we don't try this to improve on it or whenever somebody thinks of a process of doing things its shot down before it has the chance to show its real value. 

DT Provo7. 108 Million bond passed Nov 2015 to improve Provo schools8. 51k sq ft new Provo Power building under Const. 9.  2.5% unemployment rate for Utah County (Dec 15)10. 

Is that because you didn't want to go to all that rehab effort AGAIN, for a (mere) $44.5k improved value, if you had to spend that extra $25k to get there?

Zillow seems to have some more feed gremlins lately, others are complaining as well.In the end, it does not matter what you bought a property for as long as you have made improvements that added value.

If it is really bad, honor the existing lease and give them notice that you won't be renewing (need to make improvements, raising rents, etc.).  

Having a real estate license doesn't make a person a good agent, and if you're getting feedback from clients questioning your value, maybe you should ask a broker or someone else for their objective opnion on how you might improve your business.