These costs are generally not something you can get increased cash flow for, nor recoup.

You'll likely continue to hear different stories, for the simple reason: Different Lenders = different rules/overlays!

The question is, if you make some decent repairs to it, can you increase rents?  

FORECLOSURE: A seven year waiting period is required, and is measured from the completion date of the foreclosure.A three year waiting period is permitted if extenuating circumstances [EC: non recurring events that are beyond control that result in a sudden, significant and prolonged reduction in income or a catastrophic increase in financial obligations]  can be documented and the lesser LTV of 90% or the standard product guidelines.

This significantly increases the premiums and I'm not sure its worth it.

Since I doubled the income does it increase the value of the property? 

Lenders that sell their loans today are also taking part in what they call CMBS 2.0 (post 2007 underwriting criteria, where it is very common to see certain terms and conditions implemented for the additional security of the bondholders, and the increased risk of the Borrower (you)).The one thing that I see over and over – even with some of the biggest players in the market, is this: Investors spend a lot of time and attention on the due diligence of the property, economics affecting property performance, property management, repositioning, and on closing the loan - - and NOT AS MUCH ATTENTION IS USED TO PREPARE FOR THIS ENTRY INTO THE FINANCIAL MARKETS, (WHERE THEY WILL BE RESIDING FOR UP TO TEN YEARS) AND HOW IT CAN ADVERSELY AFFECT THEIR RETURNS.

Simple, sell to him, then buy.....or sell and buy simultaneous, with your purchase agreement contingent upon his purchase.

I am a 20+ year investor and also just recently opened up our own brokerage.This is simple.

I don't think you will find any servicer who would board this loan without concerns for being fined for compliance issues.I would recommend you just continue to cell service until it's paid down and keep it simple.