I'd look for something without such a funky original layout, lol (the addition we added for the new kitchen tacked significant time onto the project, waiting for the winter weather to break so we could dig the foundation, permits, inspections, etc.Also, I financed it via a local HML. 

Are you talking about a little metal shed you can buy for a few hundred dollars and build yourself, or are you talking about an actual structure with a foundation (a structure you'd have to get a permit to build)? 

. $50k for a complete rehab thats done on time, on budget, includes appliances, and looks professional all while pulling permits?

In Oregon for instance one city ban's nightly rentals  No Air BnB  you must have a permit to do this and they only give out a small hand full.This also illustrates clearly that when you buy rentals that are going to be section 8 your property is what it is and will never really go anywhere as for good bad or indifferent you are on the face lower the perception and reality of the area... so when you look at what's happened in the last 20 years were rental business has exploded into mom and pops you have whole sections of towns and cities that will go through and have gone through exactly what this article describes.The only time this reverses is if like this property its a big complex and the owners have the right to do this... or if its SFR in an area of a city that is regentrifing @Ben Leybovich  watching the move Thomas Crown Affair when I was on the stair master and the lead female ( Rene Russo) character was born and raised in Lima Ohio... how random is that.

This is what I think you were referring to when you said "Metrics" Here are some ideas, populations growth and forecast growth, Permits issued, new employers coming to the area, Rent vs price ratios, rent vs income ratios, Price vs income ratios, home affordability index.So how do you predict the next significant downturn.

She recently told me that her friend passed by the building one day and saw people out back hanging out, drinking and smoking recreational drugs.

You can absolutely invest in properties that do not cashflow at all or even have negative cashflow in the short term if your exits permit and end with an overall positive exchange.

@Dave Foster Is a seller with an IRS lien permitted to do a 1031 exchange without having to pay off the IRS lien?

You can make it where you have only the cost of labor and permits. 

I would examine the permits and be sure the right permits were pulled for the work done.I would be present when they and the inspector meet and would be sure the right work is done.