I just think the rents are low enough to get a whole apartment outside the in demand areas that you'd have a tough time with getting quality tenants wanting to rent a room over just renting a studio or 1BR apartment. 

You make a valid point about the active involvement required in being a landlord, even in high-quality neighborhoods.

You said you live in Austin, no better way to learn than directly so, there is a syndication group Viking Capital LLC, that is buying/raising for a 252 unit property in NewBraunfels, about 45 min south of Austin, watch their webinar at their website below and they have an 82 pg slide show as well, then take a 3 hour trip to go see it, walk the property, go into office ask about the units available/leasing how the market is from the office staff, look around for quality of property/deferred maintenace needed then drive the area for other competitor properties.

I guess I will have to decide if cash flow or “quality market” is more important for my first deal.

Build a framework for your prospective investor calls to provide a quality experience for each person 

Showing a property in bad condition is only going to attract low-quality renters.

Correct, so higher quality asset in Milwaukee is about 400-500k, will that be equal to $250 PPSF ?

It depends on your financial strength, the quality of the property, how many properties you own, etc.I like to start with one significant expense and three months of vacancy.

As for the quality, it depends on company. 

Its not different than repairs on any other floor, there is just typically more damage from low quality flooring materials as other have listed.