We're really trying to focus more on wholesale lease options aka co-op lease options rather than sandwhich lease options. 

From there, it is pretty much an exercise in figuring out what the "highest and best use" of the lot would be that is permissible and building that in an efficient, effective, and risk mitigated manner ... that pretty much sums up development as I understand it, but then again I'm admittedly a neophyte on the subject so am as curious as the OP to hear other responses.Other questions I'd want to try to figure out are what class of neighborhood is it?

The OP's tenant isn't even paying $500 a month in child support.

This is an interesting business model which just popped into my head while reading "Das Kapital" from Karl Marx. Influenced by talks from Richard Wolff who is an advocate of worker cooperation based businesses.   This...

Which the OPs lawyer said is completely legal. 

The mortgage interest for OP's personal residence is a Schedule A personal deduction.

I believe the OP, Account Closed is 14 years old.

Unlike the OP though I'm hoping to find a nice duplex, triplex, or 4-plex. 

I just am offering my experience to the OP as it was set up for us here in AZ by a competent attorney.I also agree that blanket insurance is a good idea. 

We have taken on a bit of the MI/OP fallout as well.