I’ve just heard horror stories from landlords and I’m looking for suggestions on how to best vet tenants - Good credit, no missed rental payments in last 5 years, etc.

Take out an equity line of credit on the property that can be sides as the down payment for the primary residence.

@Timothy Hero community banks and credit unions are the OG DSCR lenders.  

I don't think he would allow someone that had to put the fee on a credit card.

:Class A Properties:Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.Vacancy Est: Historically 10%, 5% the more recent norm.Tenant Pool: Majority will have FICO scores of 680+ (roughly 5% probability of default), zero evictions in last 7 years.Class B Properties:Cashflow vs Appreciation: Typically, 1-3 years for positive cashflow, decent amount of relative rent & value appreciation.Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.Tenant Pool: Majority will have FICO scores of 620-680 (around 10% probability of default), some blemishes, but should have no evictions in last 5 yearsClass C Properties:Cashflow vs Appreciation: Typically, immediate cashflow and at the lower end of relative rent & value appreciation.

CA taxes residents on worldwide income but may provide a credit for taxes paid to other states.

Many lenders and vendors rely on D&B scores to evaluate creditworthiness.2.

When you go to a Bank or Credit Union, they can only offer you what products that bank or credit union offer. 

The best scenario for the buyer buying subject to is to have enough money and good enough credit to qualify for a new loan at current rates should the due on sale clause be invoked by the lender  

im in Orange County CA and there is a huge market here for room by room rentals here. i've been doing this for quite some time (over a decade now), and it certainly has its pro's and cons. my advice if you go about this is make sure you do proper vetting before moving someone in... not only for financials/ credit-worthiness, but also for temperament and expectations in a co-living space. we ask a lot of questions like "how do you handle conflict?"