I chose properties based on Cash flow but if appreciation is important you may also want to investigate the neighborhoods as the Nexgen post renovation projections are not reflected in Trulia estimates for my Maple Heights property (shows lower) but were spot on for the Bedford Heights property.

I'm of the opinion that you maximize your learning and save a good slice of your margins along the way by being 100% hands on.While @Fred T. provides some generic numbers that do not reflect the Toledo property management market (again, my numbers come from actual experience with the local PM firms), I do think his method of going full-on with a PM first, let them get the first property setup, observe and then slowly taking the reins from there, as you feel comfortable, is another way to approach it.However, judging from the quality of PM I've dealt with in Toledo and knowing how much work I have to do to manage them, I'd still lean to going 100% hands on yourself.My opinion only based on direct experience. 

Show your house just as it is, reflecting all the good times you have spent there.

I regularly update it to reflect the most accurate information in the Cleveland market.

The first spreadsheet reflected that wife logged 844.75 hours managing the rental properties in 2014, and the second spreadsheet showed a total of 1,136.25 hours.

-Do I adjust the asking price downward for the costs of the REHAB in order to reflect the realistic offer price?

What you said above seems to reflect what I know as well.This is why I have a CPA. 

I'm sure there are submarkets within Chicago that don't reflect the overall trends of the city. 

That should have been reflected in a lower offer price. 

Keep in mind it tend to take an institutional lender a minimum of 6-12 months before they foreclosure on a property along with an addional several months to return it to the marketI would not put to much stock in the low unemployment rates as many of the workers came to West Texas to take a job and left when the job was terminated and therefore would not be reflected in the numbersAdditionally, many Sellers with equity have a hard time with the new reality .