Re-run your numbers and make sure you're darn confident in the ARV and rent.

To answer your questions1) I think that with the area especially near the local medical school and looking at comps in the area another 10% with minor improvements (Paint, minor bathroom/kitchen changes)2) Great question I did the 70% rule minus rehab for that price.

I do have the owners name and pay for a skiptracer to make it possible to find their contact info and have enough confidence in myself that I can cold call them weekly or monthly as my main means of marketing.

I am confident the townhouse has rented at market value both then and now.

Strong performance from your first investment is going to give you an invaluable sense of confidence and enthusiasm.As far as knowing the midwest, get with someone who invests in & someone who manages property in the market you're considering.

Overall we agreed to pay off their back taxes and let them stay in the property for an unspecified period of time (we estimate 2-3 years at least) for $450 /month and they cover all repairs and improvements to the property along with their own utilities.

Minor cosmetic improvements.

Minor cosmetic improvements.

Then most large home improvement stores like Lowe’s, Home Depot, etc offer free installation on carpet if you buy from them.  

Honestly, I've become a lot more confident about home plumbing and electrical systems.