Just by the size of your post it seems apparent your drive to become successful.

Am I putting too much importance on yard size?

If you want to build a 3 family then you need to make sure the zoning allows for R4 or higher and there is a required minimum lot size.  

Make sure you get the right size for your joist spacing.It also seems that the furnace duct work carries alot of sound, I need to take some more time to fill/fix any gaps where the duct work is loose.  

That same size in Pasadena acerage was worth multi millions more same timeframe and yet not a big difference in original prices. 

I'm trying to think through if there's an option....My thoughts is if she sells a house worth $300kBuys a 4 plex of equal sized units worth $400k ....and 1/4th of it is basically ignored for the 1031 purpose....Maybe she takes boot on the value of that one unit? 

Most investors use smaller to mid-sized banks.  

@Freddy Hernandez yes, most investors use a small to mid-sized lender.  

Can anyone direct me to any good (sourced) charts/graphs that show why buy&hold real estate is a much better investment in the long term than the stock market?  

There could be dozens of issues from flood plain to irregular lot size to zoning.