I would find a market with good median rents, and low home costs, and a location that has some indicators that would support future price growth (pop growth, job growth, large businesses/employers moving there).

The presence of major employers and tech companies, coupled with ongoing job creation, positions the Raleigh-Durham area as one of the top locations for job seekers and investors.

Only nonrecourse loans will not affect your personal DTI - if you personally guarantee the debt, you're going to take the DTI hit for it unless you can qualify for it to be excluded.Find a local lender who is skilled in working with self-employed and investor clients and talk through your situation with them. 

Good for both LTR and section 8 rentals depending on what strategy you're looking to employ. 

Being that the loans are based on the potential income, would employment also be a factor?

This might offset the rate difference, especially when conventional financing isn't as easily accessible due to strict income or employment documentation requirements.2.

For example currently I have a tenant who has a delinquent balance because of employment difficulties.

For myself, I own an e-commerce business so I am self-employed.

Are most landlords/PMs not contacting employers and instead simply trusting the paystubs provided?

Beyond the formal checklists: no evictions, 3-4x income to rent, prior landlord references, employment checks; I would also look at things like responsiveness to communication when we are setting showing, were they on time to showing, did they look me in the eye and shake my hand, did they show up to showing high?