The ARV will be the value of the new home...and you'll probably want to compare against other similar new construction, not renovated homes, to get the most accurate resale value.If you'll be subdividing, you can look at the project in various ways, but the easiest is to probably just count the ARV as the combined ARV of both houses, and then the expenses would be the combined expenses of both houses -- including the tear-down of one house and the cost of the sub-dividing.If this is a local project and you want some specific advice, don't hesitate to reach out to me...I know Howard County pretty well and have built new construction here...

Tanya, I'm interested in this as well, right now I have a duplex which I live in and rent the other half.

My goal is to have half of my wealth in income producing real property and the other half in paper assets.

Btw half baths are already installed and ac are in them.

Ideally, both.However some reasoning I have seen and feels logical is as follows:If you reduce your expenses by $X, you have saved $X.If you increase your income by $X, you have generated $X - taxes - value of time worked to earn that money - any other factors.So in terms of low-lying fruit (what is easiest/quickest to accomplish) cutting expenses AND THEN SAVING THE DIFFERENCE is what I would recommend doing first.My wife and I put this into practice. 

Newbie here.I own about 50 acres of raw land spread over several counties in Georgia.About half are in neighborhoods and the other is in a rural setting. 

Fastest and easiest lender I've ever worked with.

That doesn't preclude you from still selling your old property before you buy the second one and would still save you half of the fees.Of course a year can change a lot but there's no time like the present to start looking and planning.

I have closed on 4 houses in the lat year and a half.  

In my area almost half a condo building is in foreclosure and none can be rented as that's the association restriction.Are you also factoring in:InsuranceProperty managementVacanciesMaintenanceIf you aren't sure of the costs then 10% is a good number to use for pm, vacancy, Maintenance.Plug all those numbers in again and see how it looks.Also you might consider going a little further out for a SFH or multifamily.