@Jay Hinrichs exactly the risk is even more than traditional development and the profit is actually less with more operational headaches.

If it were me, I would like consider refinancing only 1 of the 2 properties now and considering the second later in 2025 or even early 2026 when rates potentially soften.

Insurance typically covers only the directly damaged area, not undamaged flooring, even if it's continuous.

With the fires in CA, you can expect materials and contractors to become even more expensive. 

I appreciate that, and you're right, any back-of-the-envelope calculation suggests that much of the wealth comes from the equity accumulation, even in the earlier stages of the amortization schedule.

This year will likely be even worse.  

They don't even need to buy anything.

The reason I even ask is because I do have a clear understanding of how loans works, or should work.

.🔹 Insurance Challenges – Even when insurance pays, it rarely covers the actual cost to completely rebuild.

Even minimally.