no rent coming in but expenses were low - just utilities and insurance. 

I've included an example below to help illustrate this.So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.See example below:DSCR < 1Principal + Interest = $1,700Taxes = $350, Insurance = $100, Association Dues = $50Total PITIA = $2200Rent = $2000DSCR = Rent/PITIA = 2000/2200 = 0.91Since the DSCR is 0.91, we know the expenses are greater than the income of the property.DSCR >1Principal + Interest = $1,500Taxes = $250, Insurance = $100, Association Dues = $25Total PITIA = $1875 Rent = $2300DSCR = Rent/PITIA = 2300/1875 = 1.23If a purchase, you also generally need reserves / savings to show you have 3-6 month payments of PITIA (principal / interest (mortgage payment), property taxes and insurance and HOA (if applicable).

Because the expenses and vacancies are going to be a lot higher.

Will they have trouble making the payments to you while also having enough money to keep up with the maintenance and repairs/ tenant issues/ all the expenses involved with owning the property?

As for cheap vs expensive...all depends on how many times you want to purchase the same item within the next 12-18 months.

Water in San Diego is real expensive.  

I recommend determining your set price point plus closing cost expense and then calculating what minimum rent would be required to cash flow the property. 

If that's not the monthly income, you are arriving at your cap rate by using incorrect expense ratios/expense figures and/or the property benefits from an extremely favorable tax abatement which skews the operating costs.

@Hsin-I Hsu  Owning a $2.5M house can be an expensive commitment, not just because of the upfront down payment but also due to the ongoing expenses for repairs, maintenance, and upgrades that inevitably come with homeownership.Renting at $5K a month, especially for a 4-bedroom house in the Bay Area, seems like a solid deal.

Accounting System with "Control" ChecksSoftware to manage revenues, expenses, payroll, and taxes, etc., and ability to verify receipts and transactions (the verification is done by upper management to check and validate the revenues and expenses)4.