I have informed the prospective tenants that if they would like to move forward they will need to pass a background check and verify income.

Quick summary:- I have two single-family rental properties that have done very well but they were financed with conventional lending so I'm a newb at presenting a fair offer to a private investor- Investment would be for $185,000 for a single-family home- House will clear $500 / month in NOI-  The house will pass a standard inspection and appraisal (I already attempted to get this property through conventional financing but it fell through because it's a condo with > 80% of the units rented.

Generally speaking, the home has to pass a 4-point inspection (roof, plumbing, electrical, and HVAC) for any financed offer (partially because most insurance companies require this, and lenders obviously require insurance).

And I shouldn’t pass a negative opinion as if it works for someone that’s all that matters. 

Once I have a tenant whose able to pass a background check like that, I will contact prior landlords to ask about any prior issues they may have had (late rent payments, damage to property, what condition did they leave their unit in, ect.).

In similar fashion, consider the impact of California’s Proposition 47 that in effect legalizes stealing up to $950:https://www.foxnews.com/us/california-prop-47-shoplifting-theft-crime-statewidehttps://www.laadda.com/lies-behind-selling-prop-47-57/https://www.latimes.com/local/crime/la-me-prop47-anniversary-20151106-story.htmlAnd yes, The Gray Lady herself will vehemently disagree:https://www.nytimes.com/2019/01/21/us/california-incarceration-reduction-penalties.htmlWhat I find sanctimonious is the bold, unapologetic attitude of the Oakland City Council to pass a law that merely appears good, kind, and compassionate (so as to fool and maybe even humiliate the opposition into silence) but in practice erodes away at a vital foundations designed to keep their city safe and strong.

Any property that is habitable can pass a SEC8 inspection. 

As the property owner you should be able to decide whether or not you want to take on a Section 8 tenant.Typically, the property must be able to pass a "check list" of items in order to be approved and considered as a "section 8 property". 

.- List your requirements (short and sweet, pass a background check) and  phone interview: 2.- Show the house.  

If you buy a meth lab you won't be able to legally rent it out unless it can actually pass a clean health inspection.