Did you get the security deposit from the wholesaler?

That article references California.2nd, I believe it's a misinterpretation of the new California security deposit law which limits security deposits to 1 months rent.

You also have to have a system in place to vet your guest (which Airbnb doesn't do anyway - all they do is "verify" their identity), create a lease agreement, accept deposits and payments and issue refunds of deposits.

Consider all the things that could go wrong and see if the lease addresses them: unauthorized pets or tenants, early termination, security deposit, lease violations, late rent, eviction, lawn maintenance, parking, etc.5.

Any online method i can ask tenant to use that can deposit the amount to my bank account which is free for tenants and safe method for me to use. i had issue with one of the check send by tenants (not a tenant fault)and i was about to fall into scam as i tried to deposit the check online but now want to stay away from Checks. venmo/zelle doesn't allow bigger amount transfer.

My question is, is there anything more I need to do to (i.e. issue a formal written notice of lease violation) in order to prepare for the possibility of keeping a portion of their security deposit to pay for eliminating the odor? 

They continued to send me letters asking me to return their deposit.

Also check your states Security deposit laws.

I am now summarizing the key points for managing rental properties to build my systems before launch ( I am strongly considering Rent-Redi software) but I am wondering how I would use this software for client's properties when collecting rent, holding deposits and the like.

With that you can open a business bank account in that name so you can deposit checks made out to that name.