My understanding is: When you buy a tax lien, you pay the delinquent taxes on a property you don't own in return for the right to collect interest on that amount from the property owner.

My rent collected covers the mortgages on my 2 townhouses plus my primary home and cash flows $331/mo after all 3 mortgages are paid.

I'm beyond my realm of actual knowledge but I BELIEVE the objection has to do with imputed interest: interest that IRS assumes you are collecting and will tax accordingly.

I collected about $500 in cleaning fees, and if I would have paid that out, I would have only made $300 in profits.

We just found out that current tenant is not someone that they had sent me for approval and they have not deposited rents that they are collecting. 

I did collect one months rent from the previous tenant before they moved out and i started my renovation, but since then i have not collected any rent from the property as it is in the renovation phase.

I listed it myself and did all marketing, showings, collected applications and did the screening myself etc.  

Skip collecting pay stubs and bank statements; those remain requirements for securing mortgage financing but employment and past landlord are more meaningful for tenant selection.

You may need to call around, but most property managers just want to know how much rent you will be receiving so they can figure out how much they will receive.When we had 6 mobiles on our hands, four vacancies and two existing tenants that were really challenging to collect from, we offered our property manager bonuses to fill vacancies and put the squeeze on existing tenants.

(Mine have views, garages and storage sheds which increases the amount of rent collected.)