Now, over a year and a half later, he sent a certified letter last week demanding the security deposit or legal action within 30 days.Please advise. 

So, create status codes for both of these and a few in-between codes to help you work smarter, not harder.

So you give us contradiction and a deafening silence as to those who are too poor (no, insufficient, insurance) or are unwilling to pay/co-operate.Woolly thinking on your part, Jim.

I am a 1099 buyer and a mortgage lender as well.

One of my friend happens to be a RE agent, landlord and a property manager himself and he seems to feel that as long as she pays rent on time and does not create nuisance, not to worry much and just keep do a quarterly property inspection.

If I thought for one minute there was a big market for EM deposits and a reliable bevy of potential clients I would be all over funding 7 figures .. but even with all my experience in lending I jsut dont see it  personally and maybe I am blind to it but I close a lot of deals for wholesalers 10 to 20 each and every month for years..

Hiring a contractor to assist with repairs and a property management company to manage rental.

It is an area you are likely more familiar with and closer to which could be helpful for your first investment and as @Sarah Kensinger metioned, you may be able to do a MTR.  

Will finish both tomorrow then work a shed site down below and a road around the property.  

We have two rentals rent by room and a househack duplex.