Thanks @Kerry BairdHey @Zack ThiesenYes, as crazy as it sounds, there are numerous products out there for the self employed investor that don't require tax returns. 

How much room you have for error to avoid losses is just one of many ways to mitigate that risk.I have personally used my home equity numerous times for leverage in real estate investments knowing that if I take a loss, I will need to pay that debt off on the HELOC from profits from future flips.

It's the craziness of the people who enable the politicians.The problem is that people who think like this are getting more and more desperate and they are more numerous than us.

Most landlords will want to pass that along to the tenant so build it into their application process.

It may have been a vetting issue but they all passed screening and a decent application process.

How do they view applications to change zoning (tendency to DENY vs consider APPROVAL?).  

You might write something that shouldn’t be in there.Most credit reporting services that you screen tenants through have a standard form letter that you can use to send out the required “adverse action notice” if you denied the applicant based on information in their consumer report.

Number of inquiries, number of applications and our showing to lease conversion rate has increased.

The CUP has a much more likely chance of approval (I spoke to the County Planners and they have indicated that those types of applications are not very controversial and have been generally approved).Is there anything I need to know about REO properties in this situation that may hinder my deal?

I would suggest working with a tax professional so that you take advantage of deducting all the applicable expenses.