My thesis was that this would lead to increased investment in the surrounding neighborhood and home values would increase.

Are they interested or concerned about neighborhood crime, supporting data for surrounding rental rates that might affect your future cash flow, pictures or video of the property showing the class of the neighborhood and the property itself, ... ?

Is the surrounding areas trending also with increased density?

Just a side note.. houses in Cupertino that were built in the 50s and 60s many times had NO insulation they just put in two furnaces :) And as you noted they sold for 15 to 25k.. in those days I still remember late 60s when they were crawling up to the 50k mark..

I'm specifically asking my question surrounding my 3-unit residential building.

Surround yourself with supportive people to build confidence and success in the industry.Good Luck!

And the rules surrounding replacement are much more relaxed.  

It is vital to surround yourself with a strong support system.4.You will become very aware of your goals and that most individuals do not have goals further than next week.

However, over the last 20 years there have been some favorable plms and rev rulings (particularly surrounding trusts) that owning a membership in an entity and converting that to tic still equated to the same level of ownership. 

If you look at the surround areas of a metro there are usually still inventory with less competition.