The property would serve as security for the loan and all payments would flow back to the solo 401k plan and continue to maintain their tax sheltered status.

I don't want to continue to show a loss but I also don't want to take a major hit come tax time. 

Given that there is a possibility that I may have to tear the walls down, does anyone think it's worth it to continue to invest in this rehab property?

We are looking at amenity packages as well as add-on features such as "Fill the Frig" and "Book an adventure" concierge-light type activities. 

If I didn’t need the money I would tend to hold, not for the cash flow but just because an asset in SD is so valuable and hard to buy again, long term it will likely continue to appreciate.

This is critical to your continued success if you are new to investing. 

@Robert DelVecchioI believe that on Zillow under "Price / Tax History" it will initially list the price the house is for sale, then when an offer is pending Zillow will add a line that states "Pending" under "EVENT" but will continue to use the initial list price under "PRICE". 

For one property it is $10/month and it has a pretty full featured accounting system, an online app, background checks for $15, and online rent payments for .50. 

I wanted QuickBooks online, but if you want the class tracking feature, it's $60/m!

If it were me, I would just keep the tenant in place, and continue using the $775.00 towards paying down the money used to purchase and rehab the home.