It has a separate bathroom, shower, the plumbing and electric are up and running, It has a separate entrance too.I don't have permits to use it as a bedroom. 

I also agree with some of the posters above that you want just go ahead and factor in property management into your numbers when looking at cash flow (even if you just use that extra 10% to pay down principle or reinvest).

So I pulled permits with the city.

The rate is usually better than a cash out you just cant cash out any extra equity

Seems like he thinks he can get extra $$ out of you since the insurance company already paid you.

Who gets to pull permits? 

and exactly how much is needed - even if 100% construction financing, there will be interest & closing costs, insurance, plus often fronting the construction costs before the draws are disbursed, drawings/plans/permits that may not be covered by lender's loan...  3) Agree who will pay for any budget overages.

You dont put a mound system in until you have a house permit , they are sized to the dwelling 

It also means you are paying an extra fee for this middle man structure.  

I’m from California, so do you think I should account for anything extra?