For example, I mention that every adult must pay a $30 application fee, pass my credit/criminal background, make a combined income of 3x the rent, and whether or not the property accepts pets.

He would need to rely on one of the other tests, most likely #4 - significant participation, i.e. would need other investments outside of this partnership, and most likely other STRs. 

I attribute this to the legal system and more specifically contingent fee representation most plaintiff's rely upon. 

DO NOT rely on AirDNA and similar sites that just use an algorithm to analyze numbers.

Most also rely on beefed up rents and unrealistic operating expenses in their pro-formas to justify higher sale figures and can generally take advantage of their investor clients who are not familiar with the nuances of the market.Again, my recommendation is to be more active with your earliest investments but if you feel so strongly about a particular market network and partner with the leading developers  in that  market.

Do you go to the court house at all or just rely on lists?

Even so, I cannot be discriminatory and will rely heavily on prescreening.

It relied on everything going right and nothing bad ever happening. 

I am starting to worry about the viability of my business simply relying on airbnb and VRBO.  

I rely on AirDNA mostly for that