The current rebuild cost estimate on the house is $311,000 which is higher than coverage is even available from the NFIP. 

Here in CT the sale price of a property often exceeds the rebuilding value of the building due to the value of the land. 

Even cash Buyers have some common sense and have to recognize that, unless they are tearing it down to do a rebuild, that somewhere along the way their capital is at risk and would not get involved in it.If I were you, I'd just say I can't help you with this one and move on.To answer your question though, if it is zoned as a SFR, if it has a CO as a SFR, appraises as a SFR, has a utility set-up as a SFR, then one should value based on the Sales Comparable Approach and not an Income Approach. 

My question: is it profitable to Raze-Rebuild-Sell, do repairs and sell, or just cut my losses and sell it AS IS?

The situation is the way it is because households are still rebuilding their credit and rates are very low, and once credit is rebuilt the cost of owning can exceed that of renting, especially with higher mortgage rates.The economics at $750 are different: the tenant pay does not have access to credit, he does not want to take care of a home and will let not fix leaks or change aircon filters. 

If it’s “destroyed” the city/county/state is going to make you scrape the lot clean if you don’t plan to rebuild. 

In a Northern VA market where so many old properties are marked for tear down and rebuild, (1) how can I go about convincing the seller to lower the listing price so the math supports the renovation? 

Has anyone ever tried to bring a group of investors together to rebuild a town?

Make sure you get insurance for the cash value of the property rather than the much more expensive re-build value.

If you are in the south end do you really want to drive to Duvall to rebuild a leaky toilet?