This may be an attractive option for me but i dont have any experience in dividing land.  

Obviously, blue collar, university, and urban areas attract more renters than others and that does not change no matter where you are in the country.  

I've got 5 duplexes in Jackson and Adrian Michigan that I own and am starting to look into transitioning to small apartment buildings, however, the cash flow doesn't appear to be as good (which goes against everything...

Also, many people are attracted to Mikwaukee because they see the D class properties that cashflow and think it will be great.

Maybe you already have them but if not though that would be a large cost its well worth it to attract more and better tenants for a higher price. 

Are there reasons you haven't attracted better quality tenants?

If this is a business that is going to be your only business and you are going to run it day to day then owning the building and land if you can get on favorable terms might make sense.The KEY is how attractive the real estate is.

I have done some research with the Building/Planning Depts in the last few days and found out that we can replace the older home with a new one of like size without having to process a CUP, so that makes this deal more attractive.

If the seller is in the position to sell the house retail (not distressed), then your offer doesn't sound attractive at all.

I guess the first line of business is to determine a city in which to meet.Should I start another thread to attract those with keyword alerts?