Going through those deliberations with one of my investor clients.

So I can say that I am not a total noob to but there is so much more to learn from you all.My strategy has deliberately been very narrow to only invest in rentals as I have a full time job that I love.My 10 year goal is to build passive income source to be financially independent.

My paper application is very deliberately designed to look friendly and easy to complete, and I often do need to coach people on filling it out.  

If you deliberately exclude all applicants with children, specifically because of their family status, you are very much violating federal fair housing.  

Usually they are hard to scratch unless done deliberately.

Is this a mistake or deliberate?

In the appreciation-only scenario, you suffer the temporary hit to net worth that you point out, but it is not offset with cash flow.By the way, you should check out a really interesting article that came out in 2012, studying commercial real estate over the period from 1977-2011, called "Real Estate:  Alternative No More," by JP Morgan Asset Management.  

The house was purchased by the homeowner in 2002 for $165K listed under "Coveyances" then in 2005 under "Liens" there is a conventional loan from JP Morgan for $50K .

unfortunately most appliances have short life spans these days and that one back up could have done it in.As far as getting the tenant to cover the damage you may be out of luck on this unless you can prove that they where somehow deliberately trying to damage the dishwasher or negligent by pouring stuff down the sink that caused the back up.best of luckMike

I would not likely happen deliberately.