You mentioned that you've been paying water / sewer for all 4 units. 

A two bedroom 1,300 sq ft cabin is going to go for way less than a 2 bed, 2,400 sq ft cabin.One of the issues out there too is that some are setup as legal 2 bedroom cabins because of the septic but then they have lofts and such that allow you to rent them out as 3 or even four bedroom cabins to improve the rent.You mentioned one nearby you with a similar layout.

The article mentioned several houses that got purchased at prices $40K or $50K above asking. 

Building a duplex on a single-family lot can be a great way to generate additional rental income, especially in a market where multifamily properties are scarce.To evaluate whether this is a viable strategy, here are a few steps to consider:Zoning and Permits: Since you mentioned the property is zoned R-2, make sure to check the local regulations regarding building a duplex.

As others have mentioned, the rate will be higher compared to a loan with a 5 year prepayment penalty. 

@Maynhia Stott If your focus on high interest rate is solely for getting a higher rate of return on redemption, then I think you would want to emphasize penalty states because many of the states you mentioned, like Maryland, would only yield that high interest after the 12th month.

I mention all this because it's not a jammed up, slap dash space but from an insurance perspective do you think I should be concerned about the interior inspection and the 2 family zoning but 3 separate tenant discrepancy?  

Also as @Jake Baker mentioned we are seeing BRRRR investors have a lot of success in in Jax area.

My name was mentioned as having been the source of information.  

I'll also mention that one such outfit informed me that insurers use an estimation software which provides standard rates for all phases of construction work.