We decided not to enter into a lease with her but wanted to know if we must return all, part or none of her Security deposit?

It's not a BRRR model where you simply hold for cash flow. 

‘lifestyle’ business – ie simply intended to be run by and to provide an ongoing source of work and income for the proprietors, no clear vision for the long term future?

If you keep it up, you'll be entering in the game in no time. 

Or simply as a manager? 

It is zoned to allow for a higher density so I don't need to change that, I'm simply looking to divide one lot to three.In Lancaster County, SC all you have to do is have it resurveyed and file the new plat with the county, but I am imagining Mecklenburg will not be that simple.

@Akeen Felder In addition to @Russell Brazil's point regarding net listings, there's also the issue about "fraud in the inducement", meaning that you entered into a contract to purchase a property when you had neither the intent nor the ability to do so.Further, your state licensing laws may have something to say about whether you owe a fiduciary duty to the seller.  

If you have a general idea of the returns you'll be targeting with the smaller purchase nearby simply compare the two from the ROI and risk involved.

I have my favorite gear classified ad sites and get much better deals at those sites.Note a value add does not need to be constrained to simply rehabbing a property (but that is what my value adds have consisted of). 

I'm looking to enter the market buying a 100k house to do medium repair and have it be value add.