My only concern is that the main house only has 1 bathroom and the only additional is in the below guest suite.

I added a bathroom.

New kitchen, bathroom, flooring, paint, driveway, patio, retaining wall.

Then, in a couple years I could replace the roof at my discretion.On the flip side, if the appraisal does get revised, I could continue as originally negotiated essentially rolling a new roof into the low rate 30 year mortgage loan.The more I consider it the more the lower closing price and payment sounds desirable with the exception of needing a new roof literally hanging over my head.What would you do?

Then it’s just up to majority vote essentially.

Say, 3 rolls of toilet paper per bathroom per 5-day reservation and track it that way.

Essentially, you're looking for capital for deals.

However, it is seeming to me that it is extremely risky for those who are not essentially experts in rehab.

It all comes down to risk tolerance and your individual situation.It should go without saying, but insurance companies are profitable, which means in the long run they pay out less than they collect, which means that essentially you are paying them a lot of money, for only a little bit of repairs.The caveat of course is you need enough cash on hand to cover deductibles. 

Ultimately, we'd keep repeating this pattern until the project was built out and fully rented, essentially using the BRRRR strategy with new construction.