When they find something that doesn't meet code (GFCI outlets missing, no airgap with dishwashers, improper smoke detector/CO Detector height, etc.) they will write you up a laundry list of items you'll need to complete to avoid fines.

He also had ideas on appliances that I thought were different: on an appliance package purchased for a new rental he wants to depreciate them vs a replacement item such as just replacing the dishwasher he want to expense the total cost that year.

Thanks @Dawn Brenengen That is an excellent idea that I didn't think about, I will be certainly doing that.Thanks again.

I am scared to see that they think that a dishwasher is a habitability issue. 

Understand how a dishwasher, refrigerator line and disposal work together.   

@Gina Smith definitely start with Dawn Anastasi's e-book, as well as her website, coreprop.biz.

My question is do you think a dishwasher is a must for this type of rental?  

Some of my rental properties already have appliances like refrigerators and dishwashers.

It dawned on me that if I pull out a HELOC to make a down payment on a rental property, and then finance the rest of the property, there will be no actual cash flow, at least for a number of years. :( Here's what I mean. 

If its a kitchen and there is a dishwasher, you need to make sure DW will fit back into hole.2.