If you have any plans for the second lot, you may want to do your due diligence to make sure things are zoned properly for your plan.

Plus everyone puts too much weight on the $/sf cost... because that doesn't include land development, paved parking lots, curbing, stormwater sewers, possible retention pond, civil engineer, architect, etc.  

It seems to me that the key to being a good RE investor who can grow their business essentially means they know how to (a) acquire leverage and (b) manage it properly.

I've noticed that, in reality, while demo expenses are a big part of it, oftentimes people severely underestimate the other costs involved, like getting everything drafted/designed properly and getting every part of the construction permitted by the City.My overall point was that demo costs are more predictable and foreseeable, whereas people that consider demo and rebuilds oftentimes underestimate the other costs involved, which tend to add up to so much upfront cost that demo/rebuild projects end up being a not-so-great investment decision after you crunch all those numbers.  

So, 6k in cash and proper insurance would cover a full roof, or most of both furnace replacements (retail), or a large variety of odds and ends. 

Just make sure you think about the purchase properly and really make sure it fits with your goals.

What should I look for and what do I need to know about my market to properly analyze a deal in a reasonable amount of time?

They are worth their weight in gold. 

It can be a great way to get results for your retirement savings if executed properly.

Agree with hard money loans with the caveat that you have to know how to properly underwrite them, or have somebody on your team that you implicitly trust to do this for you (but this is something that I wouldn't personally outsource).