@Jean Bolger
You're absolutely right, and sometimes it is best to just walk away. As this property sits there is no way I can think of to make it cashflow. I guess I knew that on some level and I was just trying to force it. As a new investor, struggling with creative financing, building and tenancy options was a good exercise. I also got more familiar with the idea that a real deal probably won't be this hard to spot and just how much of your time and energy can be consumed when you get carried away searching for a deal in a property. ;)
@Kassandra T.
Those are great ideas. It is a great piece of land, and I would like to have it, but as I am just marrying into this family I don't think I would make any friends by tearing down the house. Plus, I like the house and the large lot in a central area...but yeah, at this point I have concluded that whatever we do with this house, it's get very little to do with BP or my investment life.
Thank you both for the great comments!