I agree 70% rule is kind of simplification, but finally i see the main difference between flipping and building is that while flipping goes you earn money on buying with cheapest repairing, but while new development/deep rehab goes you earn money getting adding value for highest market price comparing of rounded properties in this location. 

I bought the house for $105k and many comparable homes in the area have gone for $120-135k the past 6 months.

At my purchase price, the GRM as well as $/unit (comparing apples to apples in terms of LL expenses) is right on par with the area, maybe about $5k below the norm. 

Any input anyone can give me I would appreciate, I know I'm in a small market but to me it's an advantage to help me find other investors as the buy in cost is so low compared to many areas. 

Since this is a numbers game, the only way you can answer the question is to do the following:Establish a relationship w/ a realtor winning to run some comparables for you showing the potential value if you convert from a 2 flat to a singleIf the values are not significantly hire than your mortgage then hold on to it as a 2 flatIf the values are significantly hire than your mortgage then get some estimates for converting from a 2 flat to a single.  

I used Zillow.com to compare some single-family homes and find homes for sale and rents in the area to get a general idea of the market I'm looking at.I found a 3 bedroom, 2.5 bathroom home selling for $290,000 on Zillow.com.

We've been looking for other houses but haven't found anything comparable in the same price range and location.

Inquiring as to track record, how the sponsor's projected performance compares to actual performance, and learning about how they approach a potential investment property are all very important.If you are investing in a turnkey or a syndication or blind pool, there is one added risk that you don't have when you invest directly:  the sponsor.  

Those are all relativley small numbers compared to buying a property at a 25% discount - $25.000 in equity on a $100.000 property.My first property was a duplex and I thought I was getting a good deal, because it was a short sale.

The units I used were designed to install under a standard kitchen counter (24in deep), so the back of the unit was not just a flush panel, there was recesses to account for hoses & drains on the washer, and space to route the dryer vent.My units were not much more than I would have spent for comparable set of units, but I did have to order them.