The lot has an existing foundation.

I know I had a pre-existing relationship with these folks, however, the important underlying lesson is that forming and maintaining trustworthy relationships is extremely important.

I think you have the right approach, and you are dealing with a classic value add scenario where the existing tenants are actually a liability.

Can I add LLC as beneficiary to existing plan or do I need to cancel and create a new insurance plan for the LLC?

When you think you can save the sink and faucets then the stub out or ptrap or something no longer exists in the supply chain.

To do this, keep your personal expenses as low or non existent as possible.

Assuming the new LLC took title subject to an existing loan I don't know why the lender would want or need a new title policy since the insured lien priority shouldn't have changed. 

I'm guessing to add dormers to the attic, it will have to be built ON TOP of the other dormer that exists on the second floor.

But, you should have cleaned this up earlier this year so you'd be ready.As a sidebar, I would highly encourage anyone planning to do a construction (such as a garage conversion for ADU) to switch to a month-to-month lease with existing tenants leading up to construction. 

As an apples-to-apples comp with it's existing use, you could say I paid too much at the time, but I saw the untapped potential and massive buildable equity.