When is building a spec home better than buying a fixer?

[Amy Ferguson]

I live in Hawaii and have been having a very hard time finding good fixer uppers on the Big Island where I live... Is there ever a better time to build a spec home than try to fix a dump in a given price range?? Our market has begun to soar again... I have a partner who wants to flip... but his expectations of an all in $300K flip to make 200K is not realistic herein Hawaii 

In this market I think holding and renting will create a higher profit margin over the next 3-5yrs.. Any suggestions?