Remember that you are new and will have a lot to catch up on.

Utilizing an empty lot to expand and improve the existing playground can attract families and create a positive environment.

I will second @Ryan Thomson, there’s a lot that you went over in this post that is a lot to take in and is a visual that you have thought a lot but are also all over the place.

Christian FadulWelcome, there is a lot to learn here, stick around and enjoy.

Immediately Spend it on malt liquor ,lotto tickets ,and Newport’s

If those two things are good then most will work with you.In this industry, experience matters a lot to a lender for real estate investment. 

I'm looking forward to real estate investing I just have a lot to learn, as you suggested,

Maybe it was always a little rough around the edges and I just never noticed...If I sell, I would like to do an exchange to buy something nicer/bigger, maybe even a commercial property (although I have a lot to learn before I buy a commercial property).Anyway, if people could chime in as to the criteria they use when deciding to sell a property, I'd appreciate it!  

Long gone are the days what banks will loan on estimated appraised value, allowing you to borrow all of the construction costs.I agree with other that the best play may be a renovation/repair of the existing house and investigate adding a ADU if allowed by local code.Also, if the lot without a house is not worth $120k, forget about bull dozing this property and think about just looking for an infill lot to build.

We still have a lot to learn and read through such as monthly lease prices based on location, lease agreements, but this would definitely get us going in the right direction.