Their biggest mistake is always in not operating by strict business policies. 

As a newbie, I thought it would strictly be income - (mortgage + HOA + Taxes + Insurance) = cashflow.

In speaking with lenders, FHA will only allow you one FHA loan in a given area, in order to get a second FHA something like a job relocation too far away from your current home could qualify you, but guidelines were strict.

Hi Dong,Since you mentioned "profit"  and  you further brought up that depreciation is super high since you were renting it.I will assume the original purchase price was $380,000 and you were depreciating it the past 7 years and now your taxable gain is $116,727 calculated as follows.400,000 - 380,000 - 96,727(depreciation at 7 years assumed brought on jan 1 and residential building) = 116,727.Your agent is referring to section 1231 of the Internal revenue Code where the IRS allows you to DEFER gain on an investment property if you sell and acquire an investment property.The code calls for very strict rules on when you need to choose your new property once your property is sold.

Is it possible to get decent tenant with a reasonably strict application process and lease that's enforced?

There is a lot more risk for the bank when you put less than 20% down so they generally are more strict on the condition of the house in case of foreclosure.

As was mentioned above, most commercial lenders will be fairly strict in their underwriting, but others may not be.  

Explain to them that CA law means this letter would have been 3 days but you are extending this grace period to them as a courtesy just this once.This shows you are:1) Not heartless2) Strict with your lease3) Not an idiotIt also allows you to begin real eviction proceedings immediately if this guy is a deadbeat.As others have stated, you must also enforce clauses on your lease relating to late fees, etc.  

@Dulce Beltran Being a wholesaler is a grey area, some states are not that strict when someone is buying and selling a house without a license.

Or is there a way for me to land a home loan that I can use as strictly a rental?