Here is my question: There will be a number of costs incurred on the property during this reconstruction time that are normally deductions I can expense and are not specifically related to the rebuild.

Seller has agreed to credit the purchase price for the removal and reconstruction of the patio that exists above the tank. 

The misconception I keep seeing is that investors doing these venture type deals ( development, construction, reconstruction) want to attract financing with the same 20 - 25% down used  on the purchase of an existing cash flowing with debt coverage improved property.  

I used hard money to reconstruct unit A and unit B was in good condition (still needed work but not as much).

Buy good quality, brick buildings that you literally can't make the economics work on if you wanted to reconstruct it. 

Apparently, they have demolished part of the neighborhood and reconstructed few row houses from ground up in 1985.

If you don't have this coverage with your carrier, then unfortunately, they likely won't pay for your loss of rental income over the course of reconstruction. 

Whenever a major reconstruction goes on the assessed value goes up.

A: Coverage A is not based on the market value of the property, but on the estimated reconstruction cost of the main dwelling structure should it be destroyed by an event covered in your policy (assuming your coverage is for “replacement cost”).

The reconstruction loan through ASB is a "one stop shop" so to speak.