I don't know which nearby state you're considering (PA is probably the most attractive) but local municipalities will sometimes enforce extra red tape and/or protections for tenants beyond the state-norm.

We've only had one resident fail to pay rent, and it was someone who had all the usual red flags, but she also had a sick kid. 

By and large, QI's have very high ethical standards, and are sometimes overlooked as the engines of this tax saving tactic.]REPUTATION MARKERS 📊INDUSTRY STANDINGMembership in professional organizationsLeadership roles in FEAEducational contributions to the industryRelationships with major title companiesCLIENT RELATIONSHIPS 👥Testimonials from CPAs and attorneysReferences from title companiesLong-term client relationshipsTransparent fee structuresRELATIONSHIP RED FLAGS 🚩Overly familiar with your realtor/brokerKickback arrangements (illegal!)

You looked past a red flag right at the outset:"When application was made tenant was I am not going to to have my puppy with me so do not need pet fee or application"Total red flag.

I would love to hear from current franchise owners, be it HomeVestors, Red Barn, New Again Homes, Flip Cheap Homes, or any other flipping/wholesaling franchises out there.

Hopefully you have a Checkbook IRA to avoid the red tape and fees of going through the custodian for each transaction.

On the other hand if they are a sponsor that is experienced in stopping a skin in the game, that's a huge red flag for me.c) how open to scrutiny are they?

If you have an active root...over time it will grow back in there unless you excavate, cut and remove. 

What is it you do in real estate in Redding?

Only caution is if they don’t have checkbook control and there’s a time crunch going through the custodian can cause delays and red tape to deal with.