Opportunity or Pitfall in great school district?

[Philip J Antonello]

 Hello all this is my first post, I come to you asking for objective and detached opinions.

I happened upon what I feel could either be a steal of a deal or horrendous money pit and the feeling changes day to day. Its in very stable area and in a school district in suburban PA with 8-9s from grade to high school , two small single family homes on the same lot of land. Rooves and boilers/heaters all <10 yr but both are in need of full cosmetic renovations,(new floors,  bathrooms, kitchens, paint) both are listed as 2 bedroom 1.5 bath but one is about 1000 sqft with potential for upgraded sqft and the other is about 700 sqft with maybe ability to finish a basement , however that might be a stretch. Rent for single family homes 2 bd 1.5 bath in the area run between 1100 to 1600 and 1500 to 2100-ish 3 bd 1.5 bath.  So i figure after renovations, 3000 gross is the benchmark. Original listing was 370000, which was astronomical. I learned the seller was motivated and I put in what I thought at the time to be a lowball offer for 265000 and it looks like it might be accepted.  Houses similar to the larger on the street go for 235 to 300 k . The smaller bungalow, I'm just guessing could be priced at 100-150k renovated. So my logic has led me to think sub-division and sell.  Another wrinkle is that behind these two bungalows is a relatively large .6 acre field that is sitting unused. There is an easement that runs between both bungalows and leads directly to the field , so i could perhaps flag subdivide that and keep the 2 houses intact, although these are both big "what ifs".  I've estimated renovations will cost 20k and up to 50k  if i put in a parking lot, redo the electric, finish either the attic or the basement and the 25% downpayment plus cc 75k so   potentially 125k investment.   I have the time and knowledge to do the floors , paint, cabinets, bath fixtures myself.  With so many variables - I just want know if this is a good deal at its core or am I  biting off more than I can chew ?  I also don't know whether its smarter to flip or hold and rent. Thanks very much for any and all comments.

Key numbers- 

265k Purchase price  - 400-450 resale value
75K downpay +cc
50k renovations
3k gross rent

1.25k net rent
3.5k tax

10.63 cap rate 

18%ror