The Midwest offers some great returns and also will be less likely to see decreases in asset values if interest rates continue to rise.Be careful in your analysis and I wouldn't plan for a great deal of appreciation at least in the next couple of years. 

Once you reach the 4 bedroom mark you renter pool is decreased and becomes more seasonal.The best locations in town are typically within a 5 block distance to the seawall with the area opening up around 27th Street to encompass the entire historical areas.

Having enough margin in rents, such that again, I could handle having to decrease rents if necessary.3.

Heartland MLS is showing a September decrease from 58 - 51 year over year in Sept from 16 - 17.  

-What does that agent do when there's suddenly a noticeable decrease in demand? 

That $40k in equity is now only worth 3 times its face value, and as the property appreciates more, that equity's value decreases even more. 

Without any forced appreciation, increased NOI, decreased expenses, or creative financing (seller financed) you most likely don't have deal.

If rents were decreasing that I would understand the need to charge the landlord and in addition to the tenant a fee just to keep the lights on. 

Decreased living expenses4.

I would think that doing a large amount of doors and windows would give you a price decrease as they do not have travel time to get to the job for just one or two doors or windows.