This makes for a low stress BRRRRAre you risk adverse?  

People get denied housing for all kinds of reasons, but it's the FCRA that mandates the adverse action letter, I believe. 

I would rather face adversity & see the result before I recommend something.

My friend Ed (an octogenarian) reminds me, "Any problem that you can fix with a checkbook really isn't much of a problem".From Napoleon Hill: "In every adverse event lies the seed of an equal or greater benefit".

A notice is taken to be received:i.in the case of a notice delivered by hand, when so delivered;ii.in the case of a notice sent by pre paid post, on the third day after the date of posting;iii.in the case of a notice sent by facsimile, upon the receipt by the sender of a transmission report from the dispatching facsimile machine which confirms that the facsimile has been successfully sent; oriv.in the case of a notice sent by email, upon the receipt by the sender of a confirmation from the recipient or the recipient's email server that the email has been received by the recipient.b.If any provision of this Agreement is judged invalid or unenforceable for any reason whatsoever by a court of competent jurisdiction, such invalidity or unenforceability (unless deletion of such provision would materially adversely affect one of the parties) will not affect the operation or interpretation of any other provision of this Agreement to the intent that the invalid or unenforceable provision will be treated as severed from this Agreement.c.This agreement is governed by, and must be construed in accordance with, the laws of the State of Victoria, Australia and the parties irrevocably submit to the exclusive jurisdiction of the courts of the State of Victoria, Australia and their Courts of Appeal.

Lenders are risk adversed and won't lend unless you have a track record running MF, or have a 1-5% credibility partner who has deep experience.You can gain some credibility by taking an MF boot camp.  

Yes, this occurs and in my opinion, if you are a risk-adverse investor should be avoided. 

I know I have to send an Adverse Action notice, but I imagine the applicant will ask what issue caused the conditional part of the approval.

As others get more risk tolerant, the smart investor becomes more adverse.

Hmmm ... maybe you add to your tenant screening criteria that applicants using those mobile phone services will have some sort of adverse action.