@Tim Porsche Current income is clearly insufficient to pay your rent.

A $400k home probably won't bring in sufficient rent to cover all your costs.  

I absolutely agree that moving forward with them is a bad idea, and I have already informed them I can't rent to them based on minimal qualifications (their combined income is insufficient - among the other glaring red flags) within the hour after the initial phone screen.

If you give an inch it will be taken, deemed insufficient, and then held against you.

Any checks returned due to insufficient funds will incur a $30.00 fee.

😢He said he has more than $30k but really nothing. 2) one insufficient to present landlord; 3) too much debts.I hope he will not try to suit me.

Just remember that the GRM is but one metric that is useful for performing initial triage on a property, but insufficient on which to base a purchase decision.As an illustration, we looked at two small properties recently, both bring in approximately $3500/month ($42000/year) and both were priced a little differently: one at $200K the other at $240K ... yielding GRMs of 4.76 and 5.7 respectively.However, when you looked at operations, the first business had an operating expense ratio of 82-83% (central boiler, landlord carrying electricity) while in the second property, the tenants were carrying their own electricity but there was still central heat and DHW for a operating expense ratio about 20 points lower around 63-65%.The result is that the higher GRM property produces 2.3 times as much net income as the lower one.

Second, I don't know who told you 2-3% for a down-payment but it's insufficient. 

It is a safety measure that you can not cancel a check of have insufficient funds and there payments are liquid.

If you are the landlord, and you are uncertain whether or not the reasons you wish to reject an applicant fall under the Federal Fair Housing Act, it is always best to consult with a local attorney who can guide you through the legality of your options.However, there are some legit reasons like insufficient funds, poor credit, a record of evictions and so forth.