Unfortunately, 40% occupancy is not enough to get out of the red as the breakeven point requires significantly better occupancy.

@Adam L. this has so many red flags going up.  

If you find high vacancy, that is another red flag for the market and you should be cautious.

It is a big red flag to me that someone makes above that minimum criteria and is already asking up front for you to accommodate a paycheck to paycheck lifestyle that's incongruent with the whole point of meeting that very criteria point.When verifying income, did you check paystubs, or did you just take what the applicant reported?

As @Jeff Wallace said there are many players and sometimes it's not worth the temptation.

This could raise red flags with the underwriter. 

Behind the scenes, some major players in the real-estate industry have been skipping the term for years.

Also are their any other red flags to  watch out for in neighborhood locations/crime etc.  

We just want tenants to know the "red flags" that pop up and how to avoid those scammers.

Be aware of any fees that will apply and also ask them what red flags they'd look for.Good luck!