While you aren't technically under contract until you sign the seller addendum and submit your earnest money deposit, it is bad business.  

Assume high quality product engineered hardwood (but not necessarily the highest), and professional installation.

Do they know each other and is there a bad egg in the cart?  

I have never done a loan like this.. but I always wondered what the thought process wasI understand the 5 to 10 million dollar loan with no recourse.. mainly because the PG is worthless anyway as in who has 5 to 10 million sitting around to pay off a bad loan ... :) not many leveraged to the hilt real estate investors that's for sure..but if its a great deal why not snag it and if you don't like it flip it and make a few buckaroos... just a thought.

But with my financial burdens right now, would it be a bad idea to invest anytime soon?

It is in a great location, and listed for an unusually low price for this area,  and it didn't even look that bad in the online photos (for a foreclosure), so I figured it must have something unusually negative about it that wasn't readily apparent, like "black mold" or whatever. 

Maybe there are less expensive contractors who do quality work but no idea how to find them.

I just lost a significant amount of money with a TAX LIEN CLUB that basically sold me their bad tax liens worth nothing in a state where I just could have bought the tax lien I wanted in the county of my choice.  

What is the best list to get the highest quality leads from?

Word of mouth definitely does travel so you'll find a good one as long as you ask people you know who just recently had work done to their house and if the pictures of there work looks good to your standard because bad work is unacceptable.