This gives some insulation against market downturns. 

Depends completely on the structure and how it was maintained.Items I had to address (planned for most):Plumbing, Electric, Roof, tuck pointing, boiler.Ran into asbestos which I did not address or disturb, can be fairly expensive to remediate.Windows had already been completed but insulation in the house was not great.

We also had to remove all of the subfloor and on-slab insulation and had a delay in being able to repair the slab after moving the plumbing fixtures.Item #2 was steaming right along, until someone in the City water and sewer department remembered that they might want to place a water lift/pump house on the land-locked lot.

cost depends on demo cost of existing roof, how many penetrations you are going to have in the roof, waterproofing and insulation layers.

As much as I work for and for the best, I can't control a determined rat gnawing on electrical insulation in the walls or some kind of crazy water infiltration causing a short somewhere.What I can control, I do.

Forcing appreciation gives you some extra equity insulation from a drop in prices, or if you would rather be more aggressive it allows you the ability to cash out the extra equity via refinance or 1031 to redeploy it, but this also has added risks, there is no free lunch.Conservative financing, with lots of equity and cash flow margin for error, and cash reserves is another key ... in a downturn the quality of cash flow is every bit as important (I'd argue even more important) than the quantity ... what levels of margin are appropriate depends on the quality of the asset, which directly affects the quality and volatility of cash flows; a class B property will tend to have lower initial cash flow but more steady and increasing cash flow than a class C property ... judging adequate margins of safety is the really tricky part, because not only do you need to factor in quality as stated above but also what may be perfectly adequate in a "normal" market may be grossly inadequate in a downturn ... and yes, cash flow is affected in a downturn, it is not somehow magically immune; rents may not go down, but they very often do stop.

I know SF is an insulated market but my finance people are telling me there is hurt coming to the lower level professional class.  

No, there would be massive action to insulate landlords, kind of like sending everyone $1,200.00 or raising UI benefits to 100%+ of regular income. 

Before I did that I would have blown insulation put into the cavity between the upstairs & downstairs.

I use cellulose insulation blown into the joists space in the ceilings of the basement unit.