Remember the lost something like $1billion of investor money in 2-3 years buying houses, so they probably aren't that good at estimating values in my opinion.The other real trick I see with Sub2 these days is how to bridge the gap between loan value and retail pricing? 

I would consider heading over the bridge to grab your materials in NJ, you could save a few bucks that way, good luck.

If you decide to sell that original house, we actually have a bridge loan product that will remove that debt from your debt to income ratio for the new property.

I would seek a private lender willing to bridge the gap for you short term while your cash is tied up in other deals, once you stabilize the property you can get cash out and pay them back.

The debt was covered through a bridge loan, equity was raised via private investors.

Most bridge debt lenders want larger loans in the many millions.My sweet spot is dark buildings for sale under 1 million.

Non-Recourse Bridge to Agency - 75% LTC / 3 Years IO @ 4.65% How did you add value to the deal?

Your time is worth something even if you're going using small claims court.To answer a couple of your points:  No, I wouldn't sue a home contractor over $2700 but I'd be sure to not use them again and let others know about their shoddy work.If you believe USPAP holds appraisers to a higher standard than contractors because appraisers have an obligation to the public, there's a bridge in Brooklyn that somebody wants to sell you. 

When the East End bridge opened up several years ago, land prices and home prices skyrocketed.

They might be more willing to work with you on a type of bridge-loan, especially considering the property's ARV and potential rental income.