I have raised rents around 3% annually, which actually may be a little low for my area!

I think you are saying that the listing price of a house that you want is 150k, and the seller will go as low as 140k and you are trying to find out if this is a good deal.

In the past year, we started a renovation to add the second bathroom but ran out of funds (this is an attic conversion and our contractor was way low in his estimate).

Keeping a rental is cute and all but your ROE is low ($500/mo on $260k). 

I guess maybe I've been listening to too many podcasts where people have had low offers accepted.

The house clearly had some "settling", the price was low for the market, and the house was 50+ years old, so even though there was clearly some foundation movement "in the past", it was a solid purchase. 

Seller says B then I know it is low C maybe D.

HELOAN would only be about 14% of the equity so little risk even on a down market.I am picking 10 years as it is the point where it will allow me to cash flow monthly and it keeps the rates low enough.

As an owner, you can leverage low % down programs especially for yourself as a physician which has some of the best loan options out there.

Don't build a business model around low interest rates and you'll be fine.