Last summer, I orchestrated the reconstruction of my grandmother's house into a 10-room boarding house, and am now managing the the property and its tenants. 

You could do a hybrid of this - re-construct the house, then use it as a rental investment and later evaluate it for potential sale.  

More often than not, the situation is reversed where the reconstruction cost of the property is greater than hha appraised value. 

I pulled permits for 4 of my East Baton Rouge properties (not a GC, just me) for post flood reconstruction.

Call the reConstruction team.

Started 2005 elective multifamily and track housing. 2008-2015 specialized nationwide disasters for reconstruction. 

I'd even take pics of the damaged areas then the reconstruction to show how you repaired the property. 

It's to volatile unless u are leaving it long term and since the heloc rate will change u may need to reconstruct it at a higher rate and wind up with issues.

The law of averages catches up on property loss.Personally I have seen loss / damage of investment property; due to fire on vacant investment property (which was under renovation) with reconstruction cost of about $55,000; tree branch falling on roof (occupied property) that made to replace roof for about $13,000; water damages...... 

My wife was in the insurance industry for years and she always included new foundations in the reconstruction cost of a loss.