I believe I had a strong application and a good shot at getting in.

I will run the application through Cozy.com once we have photos.

Looking at the job in their original application or move out packet will tell you loads about their money making abilities, and if they have something to go after.

I have a 2/1 that rents for that , and since its so cheap I get the crazy applicants .  

Unless I'm doing something wrong, it seems like 1% rule isn't really applicable (in TX at least), from what I've looked at it seems like 1.5%+ or 2% for a deal to make sense.

It seems like it is not applicable if using HELOC funds. 

If by the time you complete a background check, credit check, employer verification, conversations with previous landlords, an application fee, deposit and personal interview you're still having problems with your tenants, you're doing something wrong.And if you're unsure about being a landlord in general, then you can either put people on month-to-month leases so you can quickly get rid of them, or hire a property management company to manage it for you.While the landlord laws may look great in some other states, you'll may also be missing out on all the fabulous appreciation that can be experienced here in California.

They are referencing California code 1950.5 but that seems applicable only if a tenant satisfies the lease.  

I want to make sure this isn't a scam before we continue with the application. 

I think typically you'd provide the laundry machines (if applicable) and a fridge.