Tell them that you are serious about running a quality STR and to have them call you at the first sign of problems.That will give them some peace of mind and have a way to get a hold of you instead of calling the cops.

I think their general stance is going to be to go with whichever comparable property has the greatest degree of similarity in terms of (probably, in this order): location, age built, quality of construction/current condition, and square footage.

I really am a fan of RISD because it is high quality across DFW in general even relative to the big names in Collin county.

The allowed rent amount should be pegged to market rent, so it would only be way off if your unit is a way different quality or neighborhood compared to average. 

Currently I view real estate investing (REI) as a method of generating additional income apart from my 9-5.

But I also sometimes think owning only 1 property in LA would be less stressful and a more reasonable mortgage payment would improve my quality of life.

I'm not 100% sure about each one's different benefits and cons, but which method would you recommend to use if you were in my position?

Under bidding, poor quality, not following timelines - those will all kill your project.

I would base accepting them on asset quality. 

Could it be a BAD investment strategy AND fraud in the disclosures, method of marketing securities and or providing misleading information?