We're under contract on a SFH in Indianapolis and are paying all cash.  

Negative cash flow is not something I’d be okay with, but I know there are some instances where people are okay with taking a small hit for a big pay off with the appreciation (and hopes that the rent will go up).

Landlords can conduct credit and background checks and have applicants submit  pay stubs and any other qualifications they may require of any applicant. 

If they can't control there spending (or pay them self first) it's unlikely they will find success as a REI.

I would be curious to see how this plays out in the end.Exactly, more than likely both are at fault by not paying attention or caring.

They would pay all utilities and maintenance on the property and provide 2 months security deposit. 

But, when there is an emergency you are sure glad that you have been paying all of those years.

I am looking to vacate the house and prep for a 1031.I previously had the property listed, got under contract just for this tenant to be the reason we didnt make it through the inspection period.I have a good relationship with her but she is a mess, pays late every month (including her late fee, she is current), police visits, etc. 

You pays your money, you takes your chances :)

You also have to consider your holding costs - you are paying HOA fees, insurance, and property taxes.