To me, mid-tier houses are likely one of the best long-term appreciation investments because they are sought after by so many people in that market, a smaller percentage of people can afford luxury houses and also they may be more volatile but there's always demand for the mid tier price range for the average Joe.I consider myself a serious investor, my LTR's are in a place I would otherwise never travel to, my own preferences and opinions on the location are meaningless as this is purely a long-term investment decision for me and I won't allow personal preference for a location to impact my decisions.

Good reads would be Rich Dad Poor Dad by Robert Kiyosaki and How to Invest in Real Estate (the beginners guide) by Brandon Turner.

(Property is already in poor shape).

Unfortunately, to my knowledge, I don't believe there's any documentation that a future landlord might find to tip them off to the poor character of these tenants.Moving forward, I'm less dismissive of warning signs in the tenant screening process.

What did you do other than trust everyone else to make decisions for you?

If you recall also those with swimming pools in Los Altos hills that were on a hillside some of them the water came out and flooded into their homes.. it was quite random.. my kids were walking home from grade school alone ( Back in those days it was OK for kids to walk a few blocks by themselves.. )  The poor folks though on Hwy 17 connector through Oakland got pretty much squished when the top deck fell down that was very sad..

POOR CHOICE- Over $600 spent at a casino restaurant.

All of the pressure that you are putting on them will make them resentful and leave the property in a poor manner. 

Is it a poor plan or are there any obstacles I may be overlooking?

When you select the next tenant I would certainly ensure that you have your eyes on the applications that are coming in, and ask that you are involved in the decision making process. 3x income, clean credit and background checks should be a minimum for approval, even if it takes a month or so to find someone.