Lenders WILL allow a secured loan ( like a second mortgage, HELOC, Cash out refi loan).

It's the same thing from a dollar perspective as it's just the accounting classification of funds, but since they applied the security deposit to the rent they also took part of the security deposit as late fees for themselves which just feels wrong since they didn't actually get the rent, but just applied the security deposit. 

It is cheaper, easier and more secure. 

For this deal, my mother and I secured financing through a Debt Service Coverage Ratio (DSCR) loan, which allowed us to borrow based on the rental income potential of the property.

A double security deposit can. 

Security Instrument3.

For the security deposits - since we will take over is the seller required to transfer those funds to us?

If you only have 25% equity in the other property and no cash, then that probably will not work as its too risky for the lender unless you also have other properties to secure it with.

I'm actively purchasing multiple properties and would like to leverage hard money loans with terms typically ranging from 1.5 to 2 years.My primary focus is on securing financing that aligns with my investment goals while ensuring that the rates and terms are the most favorable.

I was able to to secure a loan.