South Tampa: Teardown vs Rental

[Joey Mitchell]

I own a home in South Tampa (Port Tampa Neighborhood). I bought the home for $220k in 2014. It is 5 bed\2 bath 2700 sq ft on 100 x 100 double lot but it is ugly; built in the 60s, low ceilings, poor layout, etc. I owe $160k ($55k of that is a HELOC). I just evicted the tenants and it's now vacant. Would like to hear your opinions and feedback. Here some options I'm considering:

OPTION 1: Tear it down and then build 2 homes on the lot. I have the capital to pay off the current mortgage but would then need financing to build the two homes. New construction homes on the street have been selling between $680k - $750k (looks like $290 - $350 sq ft). I don't have construction experience

OPTION 2: Sell the house to an investor. Based on conversations I've had I think I can get between $385k - $400k

OPTION 3: Put about $10k into the house and rent it out again. It's a large house but I don't see me being able to get top rent for it. Probably $2k a month tops. I was considering this option just to buy me additional time and let the market improve before I pursued option 1 or 2.