If they have a more established rental history, have been employed longer or their employment is stable, the more likely you can collect if something like this happens (and the more likely they are to pay/not damage items so as to avoid this altogether).

Then I spoke to some local residents/realtors and examined some stats on zillow for recent sales, and their prior sales - and the market has stayed flat, or even declined while the rest of the country has enjoyed the recovery last 4 years.I have some rentals in California, and while I dont expect CA type appreciation, the flat to negative trends seemed worrying, and indeed puzzling given the beauty I find in the area, the high quality of construction, and the solid employment fundamentals.Any opinions on why prices are falling?

Because you get the match from your employer.

I believe the employment stability weighs very big.

I'm finally leaving my W-2 job this Wednesday (Feb 24th) and I'll be fully self employed then.

I feel that having gainful employment under your belt of any kind will be helpful in teaching yourself about accountability, time management, and also help you secure future employment if you catch an early bad break in real estate.If you're really interested in real estate and need a cash job to help you become an investor, a lot of folks recommend working at a property management, development, construction, or other real estate related business to learn about a specific sector of the industry.

I'm new to note investing and I'm not sure I'm comfortable when negotiating note sellers but more importantly, with non-paying borrowers, having my home address as my registered LLC or on business correspondence, and my work cell phone coming up as my employers name on a land line caller ID.  

Getting your foot in the door is hard but once in the market, it usually works out if you hold long enough and buy in the core areas with good schools and employment.

For flipping, income is typically subject to ordinary income rates and both sides of the Self-employment tax.

Go through applications in order received, verify employment and income, call past landlords, if everything looks good send them a link to MySmartMove for credit and background check.