I still have to make trips downtown to pay water since they wont do a credit card or debit card over the phone.

If you use the cash accounting method, that last months rent would be rent income when you actually receive the prepaid rent.

The reason why I ask is a lot of my contractors accept square as form of payment which they just take my debit or credit card and I've never heard on a 1099k

The debiting service is the only one with that.

Every month's rent must be prepaid, including the last month's rent (or portion thereof.)   

See prepaid lawyer.

You will need to credit the Earnest Money Deposit Asset Account and debit a Earnest Money Deposit Lost Expense Account. 

We photocopied everything for the file.I wanted the banks statements, one to prove they had an account, two, I'd know what account to tap for collections, but 3, was to see how they managed money, lots of small ATM cash advances shows poor management in my opinion, not talking about debit card at McDonalds type stuff.

In the properties I take care of in the area I've found you can have better luck setting expectations of rent from the start of a lease, as opposed to when you inherit a tenant.For example, we require that tenants pay the rent via direct debit or online.

The new loan amount can be no more than the actual documented amount of the borrower's initial investment in purchasing the property plus the financing of closing costs, prepaid fees, and points"...If other Lenders have differing (better for investors) criteria, please let us know.