New construction - Cost to build exceeds value?

[Briyana Hawkins]

Hey BP Fam.. need some help! 

Spoke to a builder today who believes the cost to build our duplex is going to exceed the value in the area. 

The neighboring lot is a 952 sf duplex (total sq ft- not per unit), appraised at $97,050 (land = $7K). 

Long story short, he believes it’ll cost around mid $200K to build which would be more than the home is worth in the area (I somewhat disagree based on recent comps). 

We’ve considered 1) holding on to it, 2) building anyway because the potential cash flow from these units will be attractive to investors (estimated $950 a unit), or 3) sell the lot and use that profit for a 20% down payment for a rental property. If you were in this situation with a hot lot to build a duplex on, what would you do?

Looking forward to hearing your thoughts!