They are all about the same sq footage (2200 sqft +) as the home I am considering. 

what's the square footage on those comps you pulled from the MLS. the only thing I see that even gets close to 100k In that area is almost double the sqft of the property your selling.

But generally they don’t want to approve FHA loans in which you’re ‘downgrading’ homes in luxury and/or square footage.

This is what you do...1) tie up the property on a contract with a LONG feasibility period2) do all of your studies i.e environmental, city/usage, percolation test, geotech, wetland, etc, etc, etc.3) Work with the city/county to determine the max lot coverage/square footage/cleared area/etc4) find plans or have them drawn for this duplex and take those to the city/county for approval5) Take everything all the way to the stage of being almost ready to pickup the permit but don't pay for it and pick it up quite yet.6) Package it up and go "sell the dream" to an investor who can afford to actually build the thing.Around here, raw land might be worth 1/3rd the final value of a project so if you think a brand new duplex there would be worth $150k, your new package deal could be worth around $50k.A word of caution... in my area, most vacant land is vacant because it's unbuildable or does not make economic sense to build on.

I'm not a RE Pro, but the most potential seems to be in adding a bed and/or bath within the existing square footage. 

What bed/bath counts are the units and rough square footage?

Maybe a price per square foot or some sort of factor I can multiply by the difference in square footage.

Here's the revised deal:Purchase Price: $340,000Down payment: $68,000Closing Costs: 5% $13,600Square footage: ~2500Bed/bath per unit: 3/2 for bothCurrent rent: $1375 and $1300 but we would raise them both to $1500 each over 2 yearsMonthly taxes and insurance: $525Estimated monthly mortgage payments on $272,000 30 year loan (80% LTV) with a 4% interest rate (which he is confident about): $1300Estimated monthly maintenance costs: 5% of gross rents ($150)Capex: 3% of GR ($90)Vacancy cost: 5% of GR ($150)Management fee: 2% ($60) (he will manage it himself for 5-7 years when he sells it)Garbage/heat: $0lawn care: $100Misc expenses: $75Total monthly expenses: $2450Monthly cash flow before rent raise: $225Cash on Cash return before rent raise: 3.3%Cash flow after rent raise: $550Cash on Cash return after rent raise: 8.1%We've only alotted 3% for capex because he plans on selling it now in 5-7 years.

Water and Sewer is not metered and is based on Square footage, bedrooms and bathroomsTrash in st louis city is $14 a unit (they just raised it)Insurance is based on what we're typically able to get.Vacancy has been running about 5% which is a general statement. ( This is based on averages of everything we manage in south city) Winter and transitional neighborhoods can take longer especially during certain times of the year. 

We added square footage to the home by popping the top and adding a second floor.