I was able to sell the SFR for $62,000 with a wrap around $50,000 mortgage at 12% interest and a pre payment penalty if paid off before 10 years.

Assuming you've met that, your original loan amount was ~$364,500 with 10% and a purchase price of $405k.

I've faced some large insurance claims in the past and a public adjuster may be helpful in maximizing your insurance payout. 

If you finish the basement with a kitchen you could have a mother in law with a walk out and a garage downstairs.

There are expenses and a purchase price of this current property in the year of 2024.  

Quote from @Sushil Iyer: We have a SFH and a duplex that we own free and clear, and a duplex on which we have a residential mortgage.

See, it's a snazzy start-up where everything is remote (besides their main office in SF) and they got da fancy "algorithms" & da nifty "machine learning" with a coefficient quadratic equation here and a pythagorean theorem there that tells them what rent should be and tenant profiles you should look for.

Selling it for more money than its worth to a borrower who cannot afford it will lead to you needing to foreclose in 3 years and deal with all those headaches and a trashed home. 

We were then able to turn a garage into a master bedroom and a laundry room into a big bathroom.

So if prices are dropping how are the areas hot and a good opportunity.??