Ideally I would like divide the profits towards two properties, purchasing them cash, but since we have to meet the 1031 guidelines, we'd have to finance a part of our purchase which I guess is ok, but it's not our first choice.  

Market value of multi-family properties is derived from the NOI (net operating income) divided by Cap Rate.

Set up an LLC and have an attorney draw up the partnership documents that spell out everything BEFORE you start any work or start offering for deals.

Paying for a proposal is not common in my area but I believe here that would be a price of entry if a person had zero network to draw on to get pricing.If I was completely new with no experience and had no contacts with anyone who knew any contractors, I'd get 3 prices from 3 general contractors, with outstanding online reputations or reputations from my home insurance company. 

My plan is to sub divide it and build a house and hold the separated lot as there is a delapated structure next to it.

I’m leaning towards HELOC as I anticipate drawing 50k chunks of money at a time but am concerned about rising interest rates and the variable nature of HELOC rates. 

That's only going to cost you even more money and delay you getting another (paying) tenant in there.Given her comment about how she's already found another place and isn't planning to pay you anything, I'd probably just draw up some sort of document mutually cancelling the lease effective immediately. 

I'm split between "converting" into 2 retail spaces, or an office building.Option 1: Divide the building into 2 retail storefronts, one approximately 1,500 sqft, and other 1,200 sqft.

@Davian M.From my understanding, lawyers generally draw them up, but from what I've seen, you can easily do it yourself.

@Anthony Wick I probably figured out the tax rate naively -- I looked at my Federal Return and divided my Total Tax (line 15) by Taxable Income (line 10).