Or, plan on this being a nest egg builder and growing your equity, living in the home for 2 of the last 5 years and then selling with Section 121 exclusion. 

In working right with the builder I can offer the investors properties that are off market but have incentives that on market properties can't offer.  

He isn't rich enough to have a body guard and a security professional.

Generally it's a mix between (a) spec builders, the type who specialize in doing in-fill lot's (b) investors, as it is a normalized flip strategy (c) owner occupants, especially in high desire neighborhoods, who are a-ok with taking on the project and even some are excited that they get to build a new home in often old neighborhoods. 

an in reality they should have a builders risk policy as these were homes under construction.   

The local/ state etc (governing body) may not just "give you" one.

"I mistakenly had a rental policy instead of a builder’s risk policy."

There thinking some clean-up-fairy comes swooping in with a broom, washes the ashes away and then Bob The Builder n all his friends comes hot on the hells, Bing-Bang-Boom all is rebuilt and were singing kumbayas by Christmas.......Reality is it took about 10 years to rebuild post katrina. 

As those prices fluctuate, there is a builders somewhere putting his feet up waiting to see a market turn more active because the last thing he wants to do is start paying crews to build houses, that could drop in value while he's halfway through the build process and losing equity halfway into the project.

I just learned that builders risk and liability insurance coverage can cease once a CO is issued for a new build.