If have investment property, we are looking for relatively updated units (we are ok doing some work ourselves), class C+/B tenants, with rents either close to market rate or that can be increased.

The cost of the program is 35K upfront and then approximately $3500/mo for all marketing.

What is your current BUY formula for properties in this market?

Quote from @David Martoyan: There are many, they need to be market specific..

At a minimum, having viable plans in place for development will make these lots more marketable and valuable to potential builders when we have conversations. 

in a stick frame market and one of the cheapest markets to build we build with margin at $190 or so a square foot. that will go up over time about 5% or 10% a year to keep up with new build price increases. we are buidling a 3 story walk up and source some of the lowest priced crews.

I would absolutely counter with a price closer to market and see how they respond.

I realizing the duplex conversion strategy is more complex I probably wouldn't try it on my first property, just want to get a sense of what's possible in the Chattanooga market :) Thanks!

If you are willing to live in urban areas you may want to talk to a local bank in your market and see if they have any incentives or grant loans for certain areas.  

Chicago, with its vibrant neighborhoods and strong rental market, is a prime location for this strategy.