Check their occupancy, nightly rate and amenities.

Usually its because there is a lot of debt risk. when interest rates went up a year or so ago I lost over 300k in sydication projects I was a part of because I didn't understand this concept.

Im self employed, roughly make $130k gross anually, 1099 NEC , no debt at all, 740 credit score.  Want to get a loan for $250k in AZ

As Vince said it is a quick guideline and won't work in most places with current interest rates and house prices. 

In 1972 the 30 year mortgage interest rate was 7%.

Well if you ran realistic conservative numbers for maintenance, capex, vacancy rates, rental income, etc then you don't really need cash flow do you?

I don’t really have an interest in House hacking if long-term rates are $700 a month incl utilities for a bedroom. 

You should be able to get up to 80% LTV on a rate term refinance.

Our rating across all properties is 4.5 too. 

I expressed my objection to the rate.