On the other hand, maybe we locate it first and then 1031 exchange the older properties, increasing our new cash flow even more if we don't have to pay capital gains, affording us a larger property.

The property taxes increased from $3000 to $5000 in 2011.3.

Depending on your interest rate your refi might actually help reduce your mortgage payment and increase cash flow. 

It is confusing to look at the Zillow website and it says a new kitchen costs 30k and increases your home value 26k.

And the trend has slowed down greatly since the 1990s, to a barely 1 percent yearly increase

They do increase the reserve requirements, of course.

You have negative cash flow (which is normal while House Hacking).To improve the deal you would need to have a lower purchase price and/or be able to increase rents.

Objective: I am really interested increasing my rental property portfolio reaching certain amount of cash flow.

Am I improperly estimating the expense and income increases that's affecting profitability?

In most part of US the last 6 years in every neighborhood home values increases 8-15% a year.