On the other hand if and when the catastrophe happens you won't be sorry for having one.What do you think?  

The materials are very cheap and may not be able to withstand major weather catastrophes. 

Most investors won't run with a number like that, as that's catastrophic, but I like basing my deals on worst-case scenario and go up from there. 

you should know whether you are going to sell or hold the property (barring something catastrophic happening) before you pull permits

I see this as a means of protecting your equitable interest in the event something catastrophic happens to your Mother.

I am not stating that it is certain to appreciate like it has but econ 101 tells me that excluding something catastrophic it is likely to continue to appreciate.- Prop 13: My family suffered from this big time on a property on Gulf Shores Alabama. 

The only scenario I can think of is a catastrophic lawsuit above the large personal umbrella.

Add the possibility of the Grand Parkway, the planned space port at Ellington Field, and the planned BMW reception port in Galveston and I think you have a recipe for a strong appreciation over the coming years (barring any economic catastrophes of course).   

Hey Chris, rather than giving you points and fees for this potential catastrophe, I would recommend you see if he can borrow from an institutional niche lender, like Lima One, Visio Lending, or Peak Asset rather than risking your money on a high LTV like that.  

If something catastrophic happens then I look at it as though I just sold the property for what I paid for it and didn't incur any transaction costs.