So he paid the tax's for 5 years then went to court and prevailed and ended up with the property.

Home is 25 years old and requires a new furnace, A/C, and roof in the next 5 years. 

So you’d still have plenty of funds left to pay off debt. 

Owning the dirt and renting the house is a great plan.

If you need financial help, ask under the "Finance, Tax, and Legal" forum.

When are you planning to do the renovations and rent out the other unit?

Address this issue and learn from it.  

If it were more than three years ago and everything else on their application was perfect, then I would consider it.However, I've never seen that in 15 years of management with hundreds of rentals and thousands of applications.

As you do this more often, you'll be able to keep a spreadsheet of per square foot prices for materials and labor to get things done and you'll be able to estimate this yourself.

If I understand correctly you'd be purchasing the land, and improving it and splitting it into the appropriate "buildable lots".