I know I skipped some of the math such as vacancies, turnover maint, appreciation etc but I wasn't sold on these being the major decision factor (please DO correct me if I'm wrong here)What am I missing? 

I did factor in about $1,000/year in flood insurance alone.

In addition, prices are based upon a market which is always moving, imperfect (prices are not always in line with value), and has other factors not considered (such as distressed conditions of the property or the owner).

There are too many factors to consider.If you're simply looking for legal protection, a much simpler option is to purchase umbrella insurance of $1 - $2 million. 

Not a mortgage guy but this would depend on a lot of factors that we have no insights on. 

Personally Condo's in my area start around the 180k price point, then you're going to want to factor in down payment (18k) & closing costs (>6k), most units come furnished and ready to go so that will help with expenses.Best of luck to you! 

Also, I don't know if you factored this in but getting a mortgage on your homes will significantly decrease your cash flow, not to say you shouldn't do it.

Another exciting factor in this house is that it has a very large shop in the back yard.

And, of course, you would also factor in the cost of any additional loans you take out for construction costs if they're not included in your mortgage note or financing charges for the purchase of materials you put on a credit card if you go that route.

You can try to influence it by improving your unit(s) on the edge of a higher priced area and catch some overflow, but that's very hard to do in the middle of an area.2) HOA's typically only take care of external maintenance.