Prices dropped 10% in my town in one month, October 2008. 

I believe given their locations, 3 different local towns, no matter what the market does the rents will stay high and stable even if the property values fall off a little at some point.

I came across an abandoned vacant house in town.

If the prices don't work that, consider a town like Philly which is driveable from NYC, but also accessible with solid renters in many areas.

The town inspector says that I need drawings from an architect to see if I can get approved for that project first.

I told the lender this on the very first day, but they dragged me through two months of hell just for their jollies, it seems.Solution: I now (after going to the town and sticking my chubby butt in a number of chairs) have a list of local banks that do these loans all day long.

We also forced getting out of town every other weekend to reset.

I knew the process well and this purchase in particular was from a friend of a friend and a reputable family in my town which is Boerne, Texas. 

Quick question on the quality of tenants I can expect in smaller towns - say Sherman or Van Alstyne.

Firstly, how do you overcome the stigma that comes with whole selling in a small town where most everyone knows you or knows a family member?