Is this normal cost or high?

However, the depreciation claimed while the property was a rental must be accounted for upon the future sale of the personal residence, which could increase your capital gains tax liability.The adjusted basis of the property (original cost minus depreciation) will be used to calculate gains or losses at the time of sale.

During this renovation period would you, as the lender, want an Actual Cash Value or Full Repair Cost policy in place?

In a previous post, I discussed the difference in each of the most common cost segregation study approaches.

Will a Cost-Seg offset the LTCG on these index funds? 

The costs are just ridiculous though. 

You should split the costs - labor and materials together.

Agree it is difficult to assess costs when they vary so much by location.Keep in mind that some turnovers are sickenly expensive, and that is just the nature of the business. 

For a land cost of $150k, how would you think about how much the completed home would need to sell for to make that land cost worth it?

Poor communicators, poor housekeeping skills, prescription med abuse, big dogs that they couldn't properly care for, damaging, etc.