At the level of cash you have, the transactional fees associated with your vendor may really diminish your returns.

I am nervous to increase the value of my home at the expense of a higher tax and diminished cash flow. thanks:) 

Pay experts for their expertise ALWAYSOnly invest to the point of diminishing returns (i.e. do not put in a fancier kitchen than comps in the neighborhoodPeople are more scared of hills than they logically should beBedrooms should be >/= 15x15.

You have to decide haw much you want to pay for diminishing returns in asset protection.

The number of grown men riding around on BMX bikes has diminished.

So it may turn out that a developer's preferred strategy is to keep the existing homes, subdivide, and build units in back, which in turn would significantly diminish any economies to be realized from buying multiple lots together.

That isn't a statement diminishing the value of experience...not at all...it's simply a quantification of the quality. 

The commercial lender looks at something called "global cash flow" on a buyer; one factor of which being how well do their real estate holdings cash flow using THEIR OWN CONSERVATIVE CASH FLOW CALCULATIONS, and the bank sees all of these low cash flow SFR's investors own as a financial liability that may diminish the buyers ability to pay the monthly debt service & maintain healthy reserves on the new property being considered. 

Beware, about 95% of "deals" from wholesalers are pure garbage with inflated ARV's and diminished rehab costs.  

If they're brick foundations, and don't appear to have been replaced, and are still in good condition after 100+ years and not showing signs of diminishing structural integrity... well that sounds like a good foundation to me!