Investing is different from speculating, in that it’s data driven and therefor predictable and you have factors that play in that covers your downside and strengthen your chance of upside. 

I've included an example below to help illustrate this.So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.See example below:DSCR < 1Principal + Interest = $1,700Taxes = $350, Insurance = $100, Association Dues = $50Total PITIA = $2200Rent = $2000DSCR = Rent/PITIA = 2000/2200 = 0.91Since the DSCR is 0.91, we know the expenses are greater than the income of the property.DSCR >1Principal + Interest = $1,500Taxes = $250, Insurance = $100, Association Dues = $25Total PITIA = $1875 Rent = $2300DSCR = Rent/PITIA = 2300/1875 = 1.23If a purchase, you also generally need reserves / savings to show you have 3-6 month payments of PITIA (principal / interest (mortgage payment), property taxes and insurance and HOA (if applicable).

Are there specific factors you look for in an area to make sure it’s a good fit for this type of rental setup?

Note that the diagram doesn't consider tax implications—that's another important factor you'll need to include in your decision.

Most of the designers I have have sort of a baseline price i.e $2.50/per foot but it can go up or down on other factors

Quality pics are by far the number one contributing factor.

Factors that affect hourly rate Job complexity: More complex jobs may cost more.Handyman's experience: Less experienced handymen may charge less.Region: Some regions have higher labor rates.Minimum charge: Some handymen may charge a minimum fee for small jobs.Mileage: Some handymen may charge a mileage fee for jobs outside their service area.What to expect to payA handyman may charge between $35 and $80 per hour.

In your situation there is actually another factor that may work in your favor.Only the proceeds allocated to the sale of the building can be used in a 1031exchange. 

What you paid for it and invested in its upkeep are not factors for pricing/selling a property. 

HUD does not factor into the rent other amenities that might be included in the rent such as garage, basement, fieplace, central air, pool etc, that might command higher rent in the non-Section 8 market place.