Then either hire a property manager or pay the managing partner the prevailing rate for management in your area (8-10% of gross?).

It's selling information.He gave you the quick answer, one you wanted, he is a state employee and has better things to do than to sit and jaw with a new real estate operator, as he didn't give you the full story.Yes, if you say hey Jack, Bob has a place to rent and if you give my fifty bucks I'll tell where it is, and Jack gives you the money and you tell him, that is information.But, you are on this site, I'm sure you want a business out of this, if you go see 30 landlords and start advertsing or seeking tenants in the public arena, tha is a horse of a different color, that is what agents do.Did you tell that state guy what you had in mind, putting tenants and landlords together as a business?

This is obviously targeted at the blue-collar and service-worker employees who have trouble managing to a once-per-month rent payment.

One suggestion I heard was to base it off net rather than gross rent, but I suspect that would be a fight.

So you can update your units and command more rent.You can also install more efficient systems, mechanical and employee-based, but those also cost some up-front investment.

It is combined income of all applicants that should gross 3.5X the monthly rent.

The will often only factor in a percentage of your gross rental income per month to account for expenses. 

The problem for me is that on high volume months my water bill can be over 20% of gross rents. 

SE stands for Self-Employement and is made up of SS and Medicare taxes, both the employee and employer side.You say you don't plan on collecting SS in retirement and going based on that, I'd strongly strongly encourage you to review prior tax returns to first determine if your flipping activity was reported correctly (should be on Schedule C) and if so, how much you are paying in SE tax.

Kitchen cabinets are pretty gross... a lot of stains, dust, dead bugs... property manager recommends demolishing and completely replacing due to sanitary reasons... is that really necessary?