Some facts of the house:Location: Nassau County, NY, Town of HempsteadYear built:1929Purchase price: 290,000 in 2013Condition: AverageLot size sqft: 5000Livable sqft: 760I'm seeing several houses in my zip code that have been demolished and rebuilt into new houses with the maximum allowable livable square footage selling between $1.0M- 1.2M.Which is a better option taking into consideration, profit and capital gain tax (assuming my household income of 80K)1) Should I sell this house as is at $450K2) Demolish this house and rebuild it without taking out a loan.

Here are some considerations for both options to help you make a more informed decision:Option 1: Sell the HousePros:Immediate liquidity: Selling the house can provide you with a lump sum of money immediately.Eliminate financial strain: If the property has been a financial burden, selling it could relieve you of the ongoing stress and financial obligations.Capital gains: Depending on how long you've owned the property and the real estate market conditions, you might realize significant capital gains from the sale.Cons:Capital Gains Tax: If the property has appreciated in value since you bought it, you could be liable for capital gains tax, which could eat into your profits.Loss of potential future appreciation: Real estate generally appreciates over time.

I don't care if it doesn't cash flow and I have to shell out a few hundred to live in a unit.

Haven't heard of this particular operation, but from my experience, you will most likely  be overpaying for cash flow that wont be anything near whats promised, and with no clear exit strategy available at the end.

Last but not least, one of the Golden Rules of Real Estate is that cash-flow and profit are made on the purchase!

In some situations that can be the only way for a property to tap into the City sewer - waste flows downhill so sometimes the only option is to cut through someone else's property or share their line.

Was able to pay down the mortgage quickly and now cash flow handsomely.

What is your monthly cash flow on this property?

The BP Brandon Turner multi family book is a good read for that... some of the content that could be useful to you is calculating your cash flow, specifically running through the various expenses an investor has and the different types of financing and the limitations of each of them.

House hacking is not a way to get cash flow.