I am looking at a 700 sq ft SFH 2/1 built in 1933.

I would get "market value" for my land, he would develop the 3 houses that can legally be built, adding 18% onto the building costs as his GC/developer fee, and then we would split any profits over that.We don't see eye to eye on what the "market value" of the land would be- he says it's what I bought the place at auction for, i.e. $212K.

Especially because I do not want to lose the momentum and motivation I've built up so far.

Is it a smart idea investment to buy a SFH property with built in equity, make improvements to the home, and hold as a rental?

Is it a smart idea investment to buy a SFH property with built in equity, make improvements to the home, and hold as a rental?

There is a huge difference between a duplex built in 1985 and one built in 1905, especially if the second hasn't been updated. 

Does the borrower have any equity built up over time in house?

For instance, when I was young I spent a good amount of time in Memphis Tennessee where many areas that had nothing there when I was that age now have a lot of newer houses that were built to meet demand. 

First, deal ever I went the opposite direction on what I trained myself to do and built a home for investment.

However you also will be letting all of that built up equity go to waste.