I have usually done most of the work myself, but find I am getting too strapped for time these days.

Usually, the bungalows that can easily have a loft conversion are going to be taller homes.It is normal for basements to have 7' clearance, but unless it's finished, it shouldn't be listed as living space... and I wouldn't consider finishing a pre-WWII basement.

Brick can usually be repointed, or certain bricks replaced.

I usually prefer working with a loan originator over a broker, who acts as an intermediary and sometimes becomes a filter. 

If the lender is to get a full payoff, they're usually on board to get all their money.  

Usually the ROI is higher. 20% vacancy is really high.

Second, they said these tenants did pass all their usual checks, but another red flag for me is that my property manager only had called their current landlord as a rental reference - and that's it.

Maybe your description is overly simplified but based on the information provided, I don't see how you make money.You are paying today for tomorrow's equity.

That is not usually enforced as long as they get paid on time. 

In the long run, you pay down your properties, they usually appreciate* and rents go up over time.