Explore FHA or conventional loans based on your eligibility and current market rates.For a medium/longer term strategy, keep an eye on interest rates for potential refinancing opportunities for Property 2 when rates are more favorable. 

I suggest talking to other landlords in your area or up-to-date on the current landlord tenant ordinancesHere in Chicago (Illinois) there is no limitation on income stipulations for screening and as other said, there’s no federal stipulation either.Like @James Wise, I would move onto the next tenant without blinking an eye!

@Angelica Gray If an insured house catches fire, insurance companies pay for family to stay in temporary housing.

Keep an eye out for duplexes, triplexes, and single-family homes with multifamily potential. 

I thought about a possible preferred return of between 6-8%  with a catch up.

A trend we'll keep an eye out for is the gap between median asking prices and median sale prices.

Is there a catch?

As the impacts of climate change become increasingly evident, more individuals are likely to incorporate considerations of air quality and other disaster risks into their choices when selecting a place to live. 

can't catch up, lender won't work with them based on their now income.  

When I list a property I spend a lot of time ensuring that it's as attractive as possible in the eyes of investors.