Even though your market might prove expensive, I would exhaust all options before ruling it out.Truth is, you have a unique competitive advantage in your market.  

Tell your story - I think there's even a subsection of the BP forum called horror stories.

Even the nicer homes don't rent for over $2,750 a month there.

With the fires in CA, you can expect materials and contractors to become even more expensive. 

The reason I even ask is because I do have a clear understanding of how loans works, or should work.

@Marcus Stokes, house flipping is a full-time business operation, even with current market conditions.

At some sales they will even accept payment the day of the sale during the auction if that property has not been sold yet. 

If I had a good tenant and they continue to be a good tenant, I don't care where they legally get their money from.I agree that most S8 do not meet my criteria even without considering the source of the income.However, we have another policy that also works against S8.  

This friend and I have done 2–3 deals together, and there’s never been a payment dispute or even a hint of cutting him out of something.

Not even Balance Sheet.I don't know if they changed their model since the change of subscription plan but it isn't ideal to use it as depreciation or amortization.They do have a balance sheet.