Agree with @Ned CareyFriends or no friends,  the most important factor is that you all are on the same page, exist strategy can change, so important that you all agree to the same end goal.Also, hat is everyone bring to the table?

Am I missing any factors?

Even if you want to be in a "safe" or "up and coming" neighborhood it sounds like your downpayment will be a limiting factor.

So now I need to come up with a lease agreement between tonight and early tomorrow morning!

As long as your choice is based on the factors you listed (income meets/exceeds your requirements, references, pet), it is okay. 

Which important factors am I missing?

Personally I’d be ok with that cap rate but there are so many more factors to consider than just that one.

Cashflow is Rent minus mortgage payment minus expenses.Expenses like taxes, insurance, property management, and you have factor in capital expenditure (capex), vacancy and repairs & maintenance.

There are rules about reinvesting your gains that will be factors in how much cash you can keep without reinvesting it, if you do the exchange?

With a projected 5% vacancy rate, and 10% factored in for annual operating expenses, and a conservative $800 per month rent, I'm still calculating a Cash on Cash ROI of 19%.If possible could you provide slightly less subjective feedback, and share with me what you think an acceptable cashflow should be.