Once split, confirm that the zoning is remains R2 (some cities have minimum lot sizes). 

I would hire some kind of attorney and sue the hell out of the city to get your portion of the money back from them and then demolish the house and walk away.

I tend to just save that portion now, to help increase my cash reserves to cover MX/CAPEX, and help accumulate down payment money for future purchases.

This includes property type ( residential vs commercial), size ( range of units), location, age, price range (if applicable.) 

It depends on your location, size of property, purchase price, nightly rate you can get, your upkeep of the property, and many other factors.If your unit shows well in photos and if you build up some good reviews in the first months, and your pricing is reasonable, it will be consistently rented.We have 3 of them, and all less than 1 year so the jury is still out, but in our experience so far, the startup and ongoing costs have been higher than expected, but all are getting good reviews, so in year 2 (now that they are stable) we expect to do pretty well.You have to make sure your town allows it, and you have to decide if you will manage it yourself and take on that extra work (communicating with the guests and people who will clean/make repairs) or if you will hire a property manager, which can be expensive, upwards of 25%.

@Angela SmithA duplex apt should get slightly less than a sfh of same size .

Since she lived there, her portion can be sold tax free.

Your friend should send a demand letter for the return of his security deposit, or whatever portion of it he feels should be returned.

If there is anyone in the Portland area who has experience with new construction of apartment buildings of this size, and would be willing to give up a little bit of their time I would love to buy you lunch / beer!  

One was outside with a medium sized dog.