If you find something that works well as a short-term rental, but doesn't work well for you as a home, you'll have money but be dissatisfied when you live there.You don't even need it to produce a profit.

Quote from @Derek Harville: You could accept it and then sell it to recoup your money. 

One way to save some money, especially if you are local is to split the job. 

You could always get the extended warranty and still save money over the 3k model.

Meaning, if you take the money only, you would have depreciation recapture from your cost basis up to the original purchase price of the building (not including the land cost because it wasn't depreciable), plus a capital gain up to the insurance proceeds.Hope this makes sense. 

Hard Money then refinance traditional residential after renovated.

Liquidity is important if this is money you plan to put to work in the near term. 

This money will be used to pay down some debt I have and also purchase 1-2 additional rental properties.  

Consider partnerships or private money lending to boost purchasing power.

So sad to hear that all the time and money you or your clients invested and the trust you had for Delta Build were lost, in addition to the lost opportunity to otherwise make money.