I guess you have to weigh out 2 Options :

Sell home as-is in a shitty market w/ issues disclosed

Sell home totally redone in a shitty market and possibly get lucky to get more vs. home left in the condition. If were you gauranteed at least 50% return of that $50k invested then your out $25k

But if you got xxxx more for the home because of the work done that amount can be taken off the $50k basement fund.

But I'm not to sure you'd even get %50 back as the potential buyer will use the basement problems as a reason to slash the price.

My personal opinion is this Try to sell the home with issues disclosed, if they want to deal then Deal. If they say " I won't buy the home unless its all done " then Ok your back to this point witch is no shocker and you get the work done.

Spending $50,000 on something that the Investment Outcome or Return is unknown does not sit with me well as this is not Life or Death type of situation. Will the house still stand ? Yea. You said its common around there and how many homes fell over ?

Your better off dealing with the new owners, you may come out on top. Or hell Even witch is better.

Just my 0.02