Depending on what policy you have going forward on this, you may choose to increase their deposit amount.

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Eventually, Class A property values increased to the point that even increasing rents didn't allow them to cashflow upon purchase.So, the flood of new investors switched to buying Class B properties.

Does the bank just realize since I own the LLC that has a 51% interest in the new LLC that it naturally flows down to me? 

But ...The first thing I observed was the replacement cost portion of the quote, was, IMO, less than what it will actually cost to demolish the remains of the existing structure, pay for any hazardous waste removal following a catastrophic loss, and actually pay to replace the property in the event of a total loss, even though I used the quote feature to increase the replacement cost value by 20% (the maximum it would allow).

So, yes - there has been an increase in the percentage of wraps called due. 

I am leaning toward removal because the floor is run down, the risk of increased pests or feral cats, and there is already a storage closet off the patio.

Death, Divorce, Disease, Natural Disaster, etc.  

If you have an ensuite, which you may, it could make more sense since they typically rent for $1k / month in the Atlanta market.Converting the entire property to padsplit would make more sense in my opinion and should be able to increase your yield that way.

Once you increase your real estate portfolio using these tax free money, part of the cash flow they generate is offset by the non cash deduction (ie depreciation) so you get the equivalent to the depreciation amount but don't pay taxes on it.