If you can't close fast enough or has too much red tape, then you lose the deal to others.

Labor, supply chain (we are on an island) and red tape: from offers and closing, to funding to permits.  

That means if a tenant leaves once a year I have two weeks to get someone in before I go in the red.

In fact, on numerous occasions I've raised red flags concerning their representations, financial reporting and general investment decisions that were all verifiable through public information and should have given most investors pause before investing.

Smoking cigarettes is also quite legal, and also prohibited under the lease.I think your argument on unit count is a red herring here. 

Don't see any major red flags here, so long as you are comfortable in the low income space.

That extra cash flow isnt safety, its the market signaling with a big red flashing light, Risk.

Wouldn’t call it a red flag. 

It would be a big red flag to me if they are doing a lot of volume in this market. https://www.biggerpockets.com/member-blogs/10145/83067-limited-partner-s-guide-to-investing-in-the-right-deal

I think most hosts give 5 stars unless there is a serious issue so even a 4 star is a red flag for me that I would check into.