Looking into section 8 I noticed that some states are different.

I'm fairly new to real estate investing and I have noticed some really good prices on auction listings.

Pittsburgh is a great market to invest in as you have noticed. 

Initially my thoughts were to decrease the repair cost estimate I received from the contractor by 10k then recalculate the value.

Consider today's low interest rates, do you notice any market trends suggesting them getting lower or higher?

Prelim #'s I'm running show cap near 8% - however I'm fudging high on water (irrigation) if we tied into the city water - I'd like to have a well drilled and put in a warm season grass so the mowing season is shorter and it requires less water.Putting in vacancy of 5% though what I've noticed is the new developments stay full - also figuring Cap Ex as well, which honestly if we build right and dont own more than 10 years or so the only thing we should look at having to replace is carpet or a water heater which is minimal unless a hail storm or tornado goes through.  

More stable tenants tend to need to give notice, and move near the first of the month.Lower expectations.

but no one elseThis is what stopped my out-of-state plans for expansion, as I wanted to create my own Property Management firm.The current PM is your EMPLOYEE (and that's a bag of worms by itself) unless she has a business license (at lease a DBA)Regardless, at a  minimum, you need  a formal agreement between the lady and yourself AND to serve notice to all current tenants of (a) your ownership and (b) your contact information. 

While living in Athens as a student (in a rental property) I noticed that there is a dense collection of housing on campus.

I guess I am a bit more worried about a bad PM company which could lead to even more of a decrease of return.