I've just provided a similar answer in another thread; you might be interested in some of its component pieces.  

KMP: Here in Canada, and most places in Europe where I have worked, language is considered a component of ethnicity and/or nation of origin.If you were moving to France or Belgium would you consider it appropriate to be denied accommodations because you do not speak French, Dutch or German?

check your state regs... get whatever license you need to be a HML... maybe you don't need one for non owner occ commercial purpose loans.. many states you do not need any licnese for this activity.Then take your cash and credit score to a bank.. put up the 200k for a 5 to 1 credit facility to back fill hard money loans... make loans at 15 to 20% which is common in TN  that's what I have always gotten in Memphis... borrow from said bank at 5 to 6%  make the delta.that's 100k on the 1 million credit facility a year and 30k on your 200k.. that will get you started  then.. bring in private investors and fund deals for them once you have done it yourself and shown that you know what your doing... let all the others try to flip houses etc. while you collect your payments... and then you can leverage it up... once you get to about 5 million you have a real business.YOu bring in other equity partners for your cash component they can be passive or with you.

This is perfectly balanced reasoning and he can reject a different tenant whose picture is similar in that it has an eviction but other components aren't there to overcome it.The key to avoiding discrimination problems is to always evaluate the person as an individual.

Accountability and responsibility are the critical components to successful partnerships. 

The exit strategy is also a big component, will it cash flow on your loan as a rental? 

I like Ed's post, but as someone who has student rentals as a substantial component of our business, I disagree on the having parents co-sign the lease.Having the parent's as signatories to the lease grants them the rights of any other tenant and can lead to issues with helicopter parents.What we do is have the students bring a guarantor (parent, grandparent, etc) to the table.  

So heating component is separate than cooling obviously and the only thing they share is the blower fans, right?

Discounting potential appreciation and rent appreciation in a purchasing decision is discounting key components and in recent years would have left you behind those who purchased in appreciating markets. 

We look at each unit and improvement on a case by case basis, but in general we try to go a little above low end and not so high end that it will cause extra maintenance, such as extra components that can break.