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MSBUILD : error MSB1003: Specify a project or solution file. The current working directory does not contain a project or solution file.

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You may find the below error message while trying to create or build a VC++ (Win32/MFC/ATL) project in Microsoft Visual Studio 2012:

MSBUILD : error MSB1003: Specify a project or solution file. The current working directory does not contain a project or solution file.

Please check the following reg keys (I printed what should be there and nothing else):

[HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\MSBuild\ToolsVersions\4.0]  
"MSBuildToolsPath"="C:\\Windows\\Microsoft.NET\\Framework64\\v4.0.30319\\"
"MSBuildToolsRoot"="C:\\Windows\\Microsoft.NET\\Framework64\\"
"FrameworkSDKRoot"="$(Registry:HKEY_LOCAL_MACHINE\\SOFTWARE\\Microsoft\\Microsoft SDKs\\Windows\\v7.0A@InstallationFolder)"
"MSBuildRuntimeVersion"="4.0.30319"
"SDK40ToolsPath"="$(Registry:HKEY_LOCAL_MACHINE\\SOFTWARE\\Microsoft\\Microsoft SDKs\\Windows\\v7.0A\\WinSDK-NetFx40Tools-x86@InstallationFolder)"
"SDK35ToolsPath"="$(Registry:HKEY_LOCAL_MACHINE\\SOFTWARE\\Microsoft\\Microsoft SDKs\\Windows\\v7.0A\\WinSDK-NetFx35Tools-x86@InstallationFolder)"
"MSBuildToolsPath32"="$(Registry:HKEY_LOCAL_MACHINE\\SOFTWARE\\Wow6432Node\\Microsoft\\MSBuild\\ToolsVersions\\4.0@MSBuildToolsPath)"
"VCTargetsPath"="$(MSBuildExtensionsPath32)\\Microsoft.Cpp\\v4.0\\"

[HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\MSBuild\ToolsVersions\4.0\11.0]  
"FrameworkSDKRoot"="$(Registry:HKEY_LOCAL_MACHINE\\SOFTWARE\\Wow6432Node\\Microsoft\\Microsoft SDKs\\Windows\\v8.0A@InstallationFolder)"
"SDK40ToolsPath"="$(Registry:HKEY_LOCAL_MACHINE\\SOFTWARE\\Wow6432Node\\Microsoft\\Microsoft SDKs\\Windows\\v8.0A\\WinSDK-NetFx40Tools-x86@InstallationFolder)"
"SDK35ToolsPath"="$(Registry:HKEY_LOCAL_MACHINE\\SOFTWARE\\Wow6432Node\\Microsoft\\Microsoft SDKs\\Windows\\v8.0A\\WinSDK-NetFx35Tools-x86@InstallationFolder)"
"WindowsSDK80Path"="$(Registry:HKEY_LOCAL_MACHINE\\SOFTWARE\\Wow6432Node\\Microsoft\\Microsoft SDKs\\Windows\\v8.0@InstallationFolder)"
"VCTargetsPath"="$([MSBuild]::ValueOrDefault('$(VCTargetsPath)','$(MSBuildExtensionsPath32)\\Microsoft.Cpp\\v4.0\\v110\\'))"
"VCTargetsPath10"="$([MSBuild]::ValueOrDefault('$(VCTargetsPath10)','$(MSBuildExtensionsPath32)\\Microsoft.Cpp\\v4.0\\'))"
"VCTargetsPath11"="$([MSBuild]::ValueOrDefault('$(VCTargetsPath11)','$(MSBuildExtensionsPath32)\\Microsoft.Cpp\\v4.0\\V110\\'))"

If the above settings are already set properly, then check if you have VCTargetsPath set as a global environment variable. If it is set system wide, then  remove it as this is what might cause the above issue. On my system it was set as mentioned below:

VCTargetsPath=C:\Program Files (x86)\MSBuild\Microsoft.Cpp\v4.0