I will bet you half the lenders or more that want the 500 up front are out and out total scams you pay the 500 and never see or hear from them again its rampant in the industry right now.for real HML in your area1.

I think some landlords immediately reject prepaid rent because it can be a sign of a scam or illegal income.

Like he is actually going to encounter the types of properties you are seeking.

Make sure they are not running any grow lamps or the neighbors have not tapped into an outlet and buried a cable underground.Make sure they don't leave the doors open too.They might be trying to scam you or put the thermostat too high.

There are so many scam artists

After being in this particular niche for the past 13 years and seen a bunch of bs artists and absolute scam companies and individuals come through, I have my own thoughts on exactly what you need to look for in a company to find success.  

I don't think your thought process is all wrong, but I think you will encounter way more lazy people that people willing to work.

The only two negative facts we encountered are: 1) As noted by @Kimberly T., water usage will increase as a result of laundry both being non-coin and the convenience of it being in their own unit.

More awkward encounters.

Less than a week ago I encountered someone paying <$2k/yr in property taxes for a triplex in Oakland worth a million or so.Third, you get to write off mortgage interest and property taxes, but not rent.