Modesto is finally seeing the recovery the rest of the state has been enjoying for years, so the price-to-rent rations "at home" are no longer so appealing. 

Now that you have some experience, you should be able to rationally look at a deal and prepare for uncertainties.

I am probably pre-rationalizing to justify a giant apartment in a war zone. :)

A CAP rate is a historical performance ration, often misused as a forecasting tool. 

Your debt to income ration will not be a factor, the debt to service coverage ration on the property will be. 

Check those thing out to get a better idea.Your property management is suppose to be 10%( i thought is the general number to use) looks liek u have 8% or so there.Let me know if these things improve your numbers enough.What ration of cash on cash or Cap were you looking for to get?

I do think the books make sense but if such a foundation which is essential to all his books is questioned, am I on a slippery slope in reading these books and rationalizing with the advise provided?

If they give me first month rent and any pro-ration if they are moving in earlier, the keys will be waiting for them on the counter when they move in.If they are tight on money, they can have the keys when they give me rent and any pet fees.  

Otherwise, id say stick with the refundable deposit and explain and rationalize every possible loop hole the tenant might find and argue with you about.

Including-Grass not fully mowed (rational and we agree)-Bike outside the house (seems nitpicky)-Dark color on the bricks (not even noticeable in the picture and ridiculous)-An AC unit visible on the side of the house which has been there at least 6 yearsAll of these are at least within view the part the REALLY bothers me is the following.