(cheapest option)- Should I increase the actual cash value to $60k to cover current market value of my investment?

I think this is due to the sharp increase in interest rates over the last month.

Second, if the investor holds the investment in the Opportunity Fund for at least ten years, the investor would be eligible for an increase in basis equal to the fair market value of the investment on the date that the investment is sold or exchanged.Q.

Rental rates continue to outpace housing values, which means the gap between income and expenses is notably increasing.

FHA standards are strictest, but for the original poster to get the job done conventionally, what are minimum standards for habitability?  

I also saw that when my debt to income got increased it wouldn't look as good with my current loan when I would need to look for another property to afford both.

So I would be in it $405k making $25k profits from rehabbing then profits from increased rental revenue.

Pretty standard.

I increased the rent from $600 to $625 and signed a new month to month lease with 3 of the tenants.

That money will create more wealth and pay for the increased interest times over.Best of luck and TYFYS!