By talking to some of the neighbors I learned that the house was vacant (and no power) during hurricane Sandy.

Splitting it into 3 lots should be an easy one, as long as everything else looks good (sewer/septic, utilities, etc.) and the costs to improve are reasonable.In northern California to split a parcel that had septic it was necessary to do 'wet weather testing" to determine how much water the soil could hold before becoming saturated, etc.

This area was effected pretty bad my Sandy.

Sandy affected?

Nephew was affected by Sandy Hurricane (he was a renter that lost everything).

Sandy, Eagle Creek, and Boring to name a few.

The unstable soil around here can cause foundation/plumbing/ roof costs to jump quick if you under estimate.

I spoke to another investor and he said that it is difficult to find a level home in San Antonio because of the soil.

I am guessing(only guessing) that since this is a slab foundation, and you indicate there are issues with other houses in the neighborhood that these foundation damages are due to shrinking and swelling of active clay soils.

Sandy S Harris - It really depends on your market, and how big your farm is (urban or rural).