I have read about driving around to look for houses and mailing letters to people in a certain zip code (I am not going to do that.)

I would read the Texas Property Code regarding rentals. 

Building inspector says can be brought up to code.  

I feel like I have plenty of cause, but unsure of how to proceed lawfully so I'm not hit with cancellation fees and lose my deposit.The door locks are not consistent with property code; locking knob, keyed deadbolt & blind deadbolt.

ESRI has great data about zip codes and the wealth of each. 

Birmingham is very steady market so I strictly invest for cashflow.

Applying consistent, professional tenant screening and being strict about your lease will prevent > 90% of problems, and buying in an area where good tenants want to live will massively help you quickly find qualified tenants. 

So the short answer is yes - if you have net taxable income from a no-tax state but reside in a state that taxes income, there may be income tax due to your home state.Typically, your resident state gives you a credit for taxes paid to other states to ensure your income is not double-taxed but this would not apply to you if all your investments are in states without income tax.When dealing with CA, you'll also want to be mindful of their strict annual LLC fee laws.

(b) (1) Except as provided in paragraph (2), this division shall not apply to a depository institution, as defined in Section 1420, a person licensed pursuant to Division 9 (commencing with Section 22000) or Division 20 (commencing with Section 50000), a person licensed pursuant to Part 1 (commencing with Section 10000) of Division 4 of the Business and Professions Code, a person who is subject to the Karnette Rental-Purchase Act (Title 2.96 (commencing with Section 1812.620) of Part 4 of Division 3 of the Civil Code), or a trustee performing acts in connection with a nonjudicial foreclosure pursuant to Article 1 (commencing with Section 2920) of Chapter 2 of Title 14 of Part 4 of Division 3 of the Civil Code.

They need to put them into the correct GL code (or the right property if they manage more than one).