Estimating the value of a property with large lot

[Leon Lee]

Hi, 

I have a question about the value of a property with large lot and would like to hear some inputs from the experts here:

I am looking at a distressed property with large land (0.65 acres). The house is 3/1, 1300sqft. It can be converted to 3/2 and the total repair estimates is around $35K. Now, there are several recent sales within 1mile radius and similar neighborhoods in the past 6 months:

1) 3/2, 1100sqft, 0.25A, $220k, pending. The house is rent-ready. 

2) 3/2, 1600sqft, 0.3A, $237k, sold. The house is rent-ready. 

3) 3/1, 950sqft, 0.3A, $170k, sold, the house is rent-ready. 

Based on this information, can anyone give an estimate on the ARV of the property that I am interested in? I am thinking about $200K conservatively. Also, how should I estimate/scale the value of the land based on this information? Is that correct that my purchase price should be around $110K~$120k，based on the 70% rule？

Since the lot is large and leveled, what will be the best uses of the land in your opinion? I am thinking about two options (1) change the zoning, as one of the neighboring lots was recently done, and build 3~4 townhouses and (2) cut the current lot into three, with the current house in the middle and build two craftsman houses on two sides. I am interested in long-term buy and hold. 

Thanks

Lee