If you take two comparable homes of equal quality, condition, age, features and location but differing sizes, the smaller home will invariably show a higher value for $/sq ft.That number is somewhat useful in a development where there are cookie-cutter homes that are identical in every way, but unless the development is new, some will have been upgraded and/or updated and others will not.Your best bet is to get contractors in to bid on both a gut rehab and a tear down. 

@Jonathan M Peters you're asking the right questions, and as Cory shared, understanding how your equity (or money in) is performing for you compared to other opportunities may answer your question for you, or at the least, will give you a baseline to measure other opportunities by.The big disclaimer is you need to get educated on the process and pros/cons of performing a 1031 exchange.

You need to way out the pro's & con's to figure out what the best scenario for you is.When you compare a HELOC to a HML, you have to look at more than the interest rates and fee's.

No rent control, easy evictions compared to CA.

I initially was looking to put 50% of the finances down and do the work but compared to their experience , I would be doing allll of the work.

There is a myriad of information available for every property even in the free trial version so you can get a great feel for the power of using this.It has information on the owner, property itself, mortgage, comparables, prior or current MLS listing information (the actual photos, description, DOM, etc), and more.  

Don't compare it to Dallas however.

It turned out we were right to take the course we did when we compare what happened to the kids in the neighborhood that went off to public school.It was expensive, it slowed down our investing in real estate and it made for a grind at times.

The payments are spread out over a number of years, so the sellers are much less likely to be bumped up to a higher tax bracket, compared to receiving a single lump-sum payment. 

What are cap rates in your area compared to the class of the neighborhood..