Newbie mistake on my part - but I would have thought rational investors would all wind up in pretty much the same place from a valuation perspective, i.e. no one would pay a price that wouldn't allow a decent return. 

I understand why there are more flippers, it's much more exciting, glamorous and the money appears quick and easy, and if you're located somewhere where real estate is expensive, it's the only rational choice... but that being said, rentals are our main focus!  

What is your conversion rate (impressions to calls ration) and what percentage of your leads are warm (They actually want to buy and sell and not just call to ask random questions).

So we have two parties here that are not being wholly rational -- you due to inexperience, he due to opportunism.Follow up.

stop rationalizing it .

Take as much as out of the property as you can but do not exceed 2:1 debt to income ration.

While debt to income is obviously a key factor in approving a loan, I'm assuming you'll choose a property that improves your debt to income ration (because it should be making you money, correct?)

You need to focus on what % makes sense for you.You need to focus more on your Debt Service Coverage Ration DSCR and your Net Operating Income NOI. 

I rationalize that the pain will be worth it to build the systems to profit in the long run.

If they don't meet the 3 x rent income ration then I aske for a second deposit