What are some markets that you guys recommend would be a good fit for me to find my first investment property do you guys have any advice or ideas that I should know about?

The majority of quality lenders are all going to have terms that are in the same ballpark.

They were asking $55k, which was already a good deal, so I gave them full price.

Most institutions won't pay more than 1.5% (and some 1%).  3+% is a solid indicator that sponsor is more focused on quantity over quality.

My big question is that other than getting a good inspector out there, what am I missing? 

Here's a https://www.irs.gov/businesses/cost-segregation-audit-technique-guide-chapter-4-principal-elements-of-a-quality-cost-segregation-study-and-report to the IRS website noting specific items that are included in the cost segregation study report.

Good quality housing is in short supply and high demand in Chicago.  

Quote from @Dawson Burton: What is good cash flow for a rental property?

I am talking "old school" QUALITY, as in a quality structure, in a quality area, of a quality market, minimum B+ and generally A quality. 

Ha, good question, plenty of answers.