If not, what do you need to adjust to get back on track?

If you realize profit, sales price - purchase (and some adjustments for closing costs and capital improvements), you have taxable income. 

I think the thing that is being missed here is the Profit First method of allocating revenue to different “buckets” there are banks that do this automatically for you, whereas, with a traditional bank you would manually have to do this.

There are far fewer ARM's (Adjustable Rate Mortgages) than there were in 2007/2008.

You must execute and then adjust when needed.

If they can't find those things, they will go out a little further (start at 1/2 mile, then mile and so on) Then they will make adjustments to bed/baths/sqft.

However, the method of handling the 1099 income on the tax return may vary depending on the circumstances and interpretation of tax laws.The approach your CPA has taken, where each property is reported separately on Schedule E and then adjusted on a statement for property 3 to match the total 1099 income, could be viewed as a cautious approach to ensure compliance with IRS reporting requirements.

But it doesn't mean you stop or give up, just make small adjustments along the way.

If only 1 agent, or none, then adjust accordingly.

Adjust your sights to 65% and below.