He claimed if he didn't get the money he could not buy supplies to complete the job, which would be done in a week(I knew this wasn't true). 

I know this is an unpopular opinion around here that you won’t see on the front page of the daily BiggerPockets newsletter, but it’s the truthI get where you're coming from, and I think you make some good points about the challenges of the short-term rental (STR) market right now—high housing prices, mortgage rates, and fierce competition.

Challenges?

As someone relatively young, obtaining a conventional loan has proven challenging for me.

Additionally, the supply of homes for sale is constrained because of this and will be for some time putting upward pressure on prices in most markets.Thinking about renting your house in Seattle would be wise as someone else will pay the mortgage down, and rents and the value of the property will go up over time.

I don't know if that is included in the total rent numbers the owner supplied. 

It's a challenging enough market with an abundance of bad actors.

@Shayan Sameer,The really brief answer is that most of TN is pretty affordable apart from Nashville, which is an expensive, supply-constrained metro.The median home price in Chattanooga, for example, is about $300,000, which is a little above your $200,000 budget.

Regarding building the proprety for $700K, that is a challenge for sure.

Whenever I face challenges, I tap into my inner Goggins, reminding myself that if he can conquer the impossible, so can I.And let's not forget Think and Grow Rich, a timeless classic.