However, if you have other land or investment properties that you could use as collateral, that would likely suffice your down payment commitment and you could get the deal done without any money from your pocket.

Now that I have this valuable "note" I can use it as collateral to borrow more money from a bank at 5% to purchase something else (hypothecation).

Lots of crazy things going on with lenders right now and their collateral. 

Or by using the value of the already built unit as collateral to lower the LTV on the additional construction, assuming the land has been subdivided also. 

The insurance company is giving you a loan of their money with your money serving as collateral. 

The only thing I would add would be if you are looking to do the BRRRR method you can also look at lenders that will do cross collateralization.

Is there a way to use this as collateral for a loan at the bank to buy a property elsewhere

@Derek Raivio  ok this is just me: If I had that kind of collateral in a deal like that, I would find one partner with some real horse power even if that partner will take more of the pie than a group of investors.

I'm using a line of credit off my stock/fund investments to finance deals and then refinancing to pay back line of credit and have property itself as collateral against the loan. 

Most work this way:Rates: 10% to 14% (Most Deals are 12%)Terms: 1 Day - 24 Months (Most Deals are 6 months)Fees: 2-5 points(%) of loan amount paid at closing (Most Deals are 3 points(%))Minimum Loan Amount: $50,000 Max Loan: 65-70% of After Repair Value(ARV) 100% Rehab Financing Available (Most Deals require 20% of purchase price down payment or cross-collateral)Closing Timeframe: 48 Hours - 3 Weeks (Most Deals are 10 business days)NO PRIMARY RESIDENCES, NON-OWNER OCCUPIED ONLY, BUSINESS AND COMMERCIAL USE ONLY.