It does not seem as important when you get started with one or two, but the issue keeps getting bigger

it is technically a real thing but very rare, and there is plenty of historical data out there that shows those who have less skin in the game are at a far greater risk of default by a factor of 5-7x.

My tenant is constantly late, which is a clear sign of financial issues.

There's a good chance the issue(s) you face has already been discussed and answered.Ask questions in the appropriate forum.

I dont want the money to become an issue but a by product of helping others ( scaling ). 

With the income issue, there are screening systems available that verify income by having applicants securely log in to their payroll provider, which then shares their gross and net income with you.

Keeping your license and avoiding any legal issues is probably worth more than this one transaction.

The only issue we have run into is the prices and bidding wars.Every single home we have looked at for personal use or an investment seems to have 5+ offers and go MUCH over asking.We are currently looking at Bay Park / Clairemont / Carlsbad / Oceanside. 

To me the biggest issue with out of state investing and long term rentals is that you have to deal with property damages and/or evictions. 

They have more skin in the game then you do.Make sure you get clear title.