If you require a clean background, credit score of 700+, and zero eviction history—say so.

What's your management cancellation policy?

The insurance -"rental dwelling policy" does NOT cover basement flooding due to sump pump malfunction or sewer backup.

Is it worth pursuing my landlord policy for the claims adjuster to go after their insurance or filing a lawsuit? 

Only time I accept anything less if is it’s multiple renters and the other one or ones can qualify without the one with the poor credit score, someone comes from another country and they give me a printout of there credit score there, or the have no credit cause they’re actually fiscally responsible and have zero credit card debt at an age where most have plenty. 

What is right for you depends on your goal, skills, resources and risk tolerance.

If you exclude someone or something for every risk out there, your rental pool will be zero.

I guess what matter is investor's risk tolerance. 

In either case I assume that they have a E&O policy in place.

The numbers seem to work but it needs a lot of cash and I'm wondering if we should just buy a regular house to live that needs zero renovations and then take our cash and start investing in small multi-family out of state, which I'm planning to do eventually anyway.