For example I work with CA investors that buy in Reno, Nevada because it's close to CA, low property taxes, and job growth.

Ask to speak with some of their current owners and current/former tenants.

Another pitfall is under improving properties in low income areas believing that since its a depressed area in terms of income the people will not have high standards. 

Our current Occupancy for both Physical and Economic would have gone down, but the valuation would have gone up based on projected revenue stream.c. 

While there are many advantages like low property taxes, landlord friendly, strong appreciation it's not going to be as cheap as the Midwest and have the cash flow with 25% down.

In their first year, many agents  go through their personal network and get all the "low hanging fruit".

I currently have the upstairs (the main house, renovated and passed inspections) rented out to family members.

I contacted the seller because after the deal didn’t go through the listing was expired and removed. it has been 3 months since the deal fell through and it is still currently not listed.

Bathrooms, toilet rooms, and laundry rooms shall have a ceiling height of not less than 6'-8" above the finished floor"Additionally, in th following paragraph 1207.2.1; it also notes an exception for similar residential conditions which allows "Furred Ceilings" (Ductwork, Structural Beams, etc) to be permitted as low as 6'-4".In Short; the Diagram you posted indicates the correct conditions that would apply to your residential basement. 

Currently, you could say we are both low-income; I'm a barista and he works in sales.