I know 50%> owner occupancy raises some red flags with lenders but is that the specific issue?  

Or you could look at Trulia's Crime Map and stay away from anything thats red. 

Terms in the contract that violate the law is a big red flag.

This raised red flags for me so I decided to ask you guys.

The red cross put my renter in a hotel for the weekend.  

@Joshua WomackI don't know how hot your market is, but mine is red-hot right now.

I'm looking to sidestep all that red-tape and get down to business. . . .So, any thoughts here from the BP community?

(I would advise if the answer is yes to make sure no viscous breeds are allowed and also get an extra security deposit and possibly extra monthly rent.)Also, something that helped us that you might want to consider is for your credit check is that the score matters, but we look deeper than the score if there are things that come up (and in New Brit there are usually things that come up).If tenants are skipping out on "modern life essentials" like utility bills, cell phone bills, car payments that is a huge red flag.However, if it is a result of medical bills or student loans (or possibly a foreclosure during the crash) you may want to look past some of those.

Now I asked seller xyz during our conversation if he was the current owner and he said yes, which throws up a red flag for me.

Look at areas on zillow/red fin you think you might be interested in and then drive around them.