This would allow you to take on a smaller profit margin place and given you lower taxable income level, gotta love BAH, you would be able to mathematically take a lose each year on paper however in reality make money.

I always get back to the paper and pen for some reason. 

If you're basing this comparison on the tax benefits, and using percentages to measure returns, you might just as well blow your money in the Stock Market.1 - How many paper investments can you buy/control with $100k in the Stock Market?

Lastly, if you are still worried, moving forward write your rental criteria on paper, make sure it follows fair housing laws; go get it notarized and stick to it, the next time this happens and you deny someone for the reasons on your criteria you can clearly point out in court that your criteria was well established before they even ever came in the picture.

@Luther Avery On paper, there is no limit....In the real world, you'll find that getting 100% of your money out to be nearly impossible the first time, let alone, 100 times in a row.It's much more likely that you'll be able to get a few before that cash runs out, but at that point you should have some cashflow to help finance your goal going forward.

Rather than 1% rules, which are completely arbitrary, try setting some meaningful and focused investment goals...you'll need to be completely comfortable with where you are investing...you'll never make it if you start out by chasing paper returns. 

I did some digging and found a research paper from 2015 that gave these stats:"The Canal neighborhood is a dense, Latin American ethnic enclave in San Rafael, CA where most households are low-income (a quarter of families fall below the poverty level) and 71% of residents have only a high school degree or less.

With this information you can evaluate on paper if the investment makes sense.

Example, new light fixtures and new sink faucets, vanities, and toilets.

I am looking into acquiring a property which promise (at least on paper) positive cash flow with cash-on-cash ROE of 17%.