I'm assuming laws are different in each state.

I think that @Cara Lonsdale hit the nail pretty close to the head on this one.From my experience, for a residential (1-4 unit) loan, the bank is going to use standard underwriting practices including DTI (unless they are going to portfolio the loan, in which case looking at DSCR would be the wisest choice in my opinion).However, just to clarify a bit:My experience is that they are going to do a personal DTI, not a property-only DTI (again, unless they portfolio, in which case they can do whatever they want).

Others .dont allow even mother in law seups.

I have family close to there in Wadsworth and bro n law in pharmacy school there.

The laws vary greatly from state to state.Regardless of what area you choose, I can not stress enough the importance of seeing the property with your own eyes or if you are investing remotely, having boots on the ground that knows the area you are targeting. 

Check your local tenant laws.

I was wondering if others commonly request the seller / landlord's tax returns when buy a rental property. if so what is the common practice for this. would it have to go through an attorney to scrub the personal info?

On the KS side of Kansas City, the foreclosure laws for WY and JO counties ensure clear tax burdens prior to any sales. 

You just need to give him/her enough time (based on your state law) to agree and sign.

I would double check with your CPA , because the interest carry law changed and it effects class S or C or LLCs' ...