That’s a really smart analysis, and you’re thinking about it the right way.From a tax perspective, here’s how I would think about it:If you sell, you’re right, you’ll face capital gains and depreciation recapture, likely around 25–30% combined depending on your income and state tax.

Ideally would like to sell as 2 condos for maximum profit, but if town won't permit that, am willing to refinance and rent out with anticipated combined monthly rent of $4800. 

The other two are side-by-side, and combined, form .34 acres.

The ways around this are usually: (1) switch from replacement cost to actual cash value (ACV) or functional replacement cost, so the insured value better matches the real economic value, and (2) use an agreed value/stated amount endorsement so the company agrees up front to a lower limit without hitting you with a coinsurance penalty.

Each improvement was designed to increase appeal, enhance functionality, and position the property competitively for resale.What was the outcome?

The Conti and Finkel's  “Big Money Cash Close,” but at its core it’s really just a seller carryback combined with a new first mortgage.

Total rent for both units combined is $6600/month year round.Property 3 - 3 bedroom/2 1/2 bathroom single family.

In the property search, the home should have a good layout, is nicely refinished & fully functional for the target audience you are wanting to stay.

Combine that with what @Stuart Udis said: many investors focus on preparing for the liability event while mismanaging the property - focus should be on prevention in the first place.1.)

Quote from @Kwok Wong: Hey everyone, I’m working on structuring my first few fix and flip deals, and I’m a bit confused about how to properly combine Hard Money Lenders (HMLs) and Private Money Lenders (PMLs).