I was hoping to build a good business relationship between our companies.This week I am working on getting my LLC started so that I can protect my assets in case of emergency or catastrophe.

Assume all options net at least 50k.1:Rehab - 100kSell house and both lots together - 300kGross 200k less purchase priceTimeframe - 1 year Risks - Over budget reno (house is in pretty poor shape)2:Demolish existing house - 20kSell lots individually @ 90k each - 180kGross 160k less purchase priceTimeframe - 6 monthsRisks - Difficulty selling vacant land (note - lot 3 doors down sold 6 months ago for 125k)3:Demolish existing house - 20kBuild spec on both lots @ 175k each - $350kSell individually @ 300k - 600kGross 230k less purchase priceTimeframe - 24 monthsRisks - Larger holding costs, over budget constructionOption number 2 is my default preference in that it's the most simple and in my mind least risky in terms of catastrophic failure.  

Thanks to few catastrophic storms and big natural disasters, Arizona has the third-lowest average homeowners insurance premium in the U.S., according to the Insurance Commissioners.Property taxes: 8.38.

In the past, we have seen Freddie Mac give forbearance to Borrowers who have been directly impacted by catastrophic events.

While I still have plenty of work to do and likely several more years of investing to achieve my financial and real estate goals, it now seems quite clear to me that barring some catastrophe, I will be able to methodically and incrementally progress towards my financial goals by implementing my plan, and I now feel confident in my approach regardless of whether the market continues to climb, or if prices fall. 

These are all great answers and I fully want to ensure I understand all the potential scenarios.The other thing that came up today is in the event of a catastrophe, could an insurance company deny coverage because I breached a local occupant ordinance.

These types of things are much more likely than the kind of catastrophe that would cause a short-term investment to take a big loss.I think any investment strategy is going to come with some risks.

Diving into raw land development is not for the faint of heart and can be catastrophic financially if you make a mistake or the market turns against you.

I hate to buy for appreciation only, as then every maintenance issue and catastrophic issue (Collapsed Sewer Line, Air Conditioner, etc.) has to come out from your own pocket and not the investment.

As  you acquire assets, you can section them off into LLC's so if you ever have a catastrophic liability event, only a portion of your assets are reachable from that action.