When you analyze a market properly (1% Rules aren't properly), you're analyzing all the properties in that market at the same time.It's even more dangerous for newbies to use any Rule of thumb.Rules of thumb are nothing but shortcuts, which seems to be the growing method of doing anything now. 

I know not typical on here to have such a little amount in loans but we enjoy great cash flow that we live on, have lots of flexibility in what we can do and have no concern about making payments if the economy were to take a dump.

If you're curious - read it here: https://www.biggerpockets.com/forums/51/topics/1221700-rant-...In closing: The dangers of shifting the timing (of your income, expenses, and business transactions.)A purely mathematical exercise may indicate some beneficial timing for this or that.

However, a lot of concerns can be mitigated with looking at their past rental behavior in a lot of different settings.

@Lorenzo Wright, Once I've established a relationship with them, I'm not as concerned.

Our biggest climate risks in central Texas are typically wind and hail, so anything of concern regarding the roof could get an applicant declined including trees too close to the roof surface, roof over 10 years old, etc.

I'm not saying the list is ridiculous,  because all safety concerns should be addressed.

I have not been concerned about negative cash flowing due to gaining so much equity. 

Given your concerns about California’s high prices and tenant laws, exploring out-of-state markets is a great idea, especially for rookie landlords.Oklahoma is worth considering!

It only happened once, so you have no evidence that this is anything but an honest mistake that's been corrected.The bigger concern is the 583 credit score, because it shows a pattern of financial mismanagement.