Inherited late paying but otherwise decent tenant

[Jonathan Caviness]

My wife and I just closed on our first duplex property that we intend to house hack.  The neighborhood is our ideal location personally since it's where we grew up and both our families live in the neighborhood. With the property, my wife and I inherited a tenant and I could use some advice on how to deal with him.  He's a single guy, who lives alone but is expecting his first child (girlfriend lives somewhere else).  He's been there 2 years. When he moved in, he fixed his unit and the building up after a bad previous tenant, and he did a pretty decent job at it. He is clean and takes care of his unit and his car. Talking with him he also seems to take a certain amount of pride in the building/neighborhood.  The neighbors and the sellers all vouch for him being a standup guy. He also works nights and is basically on a completely opposite schedule to my wife and I, so we would see him very rarely and we think he will be low maintenance.  He's on a M2M lease at $600 currently, but is willing to sign a new lease with us for the year at $725. ~$800 is about the ceiling for a duplex, so we think it may be close enough. Our unit also needs some updating before we can move in and is taking a lot of my afterwork time currently, should be done by month's end though.  All that being said, the previous LL waived his security deposit because of the work he put into the building.  Not sure if he could come up with a security deposit when signing a new lease.  He often paid late with the previous landlord, deals only in money orders, and the records they kept on him are virtually non-existent. How would the bp community handle this tenant?