I can absorb the worst case scenario for one ARM since everything else I hold is on low fixed rates and cash flows well, but I'd be wary of collecting a bunch of ARMs like this if they all have the potential to go negative cash flow.

These are similar concerns for all people who are self employed.

Hi Matt, When I mentioned 1099 type tenant, I am just referring to self-employed tenants with cash flows that might vary widely at times depending on their receivables aging. 

Make sure there is no or low interest.

I'm trying to buy a 4 plex, and live in one of the units.The problem is that the rents are currently too low for the apartments to cash flow with all four units, and the rents would just barely cover the mortgage if I lived in one of the units.I could live there practically for free but what would I do when I wanted to move?

Prices are high, expenses are high, and rents are modest so the strategies that can get you enough to live on, to give some examples, might be student housing, higher risk cities with low house prices and poor economic fundamentals, or starting with buying a multi-million dollar portfolio requiring hundreds of thousands or a million+ of down payment. 

How low of a credit score should I accept?

Also he would want to know if you ever owned or bought investment properties, or just heard on a crazy website or from a guru tht you need to make a bunch of ridicules low ball offers.

Any recommendations for banks with low fees/complicated setups (setting up a Wells business bank account was basically hell) etc?

He wants his security deposit back so he can pay it to the next landlord to get a place to move, if it's low income, you gotta realize most don't have savings and he wasn't planning on moving when you bought it.