You calso never have to worry about "Money in the bank' versus a credit risk HELOC. 

I have a clause in the lease that says the security deposit will be held in so and so bank with so and so address and interest rate will be xyz.

What’s your experience been like with traditional lenders vs. private options like ours?

We were able to refinance with our go to bank at a decent rate in this environment which allowed us to pull out our initial investment and renovation cost.

How are people buying multiple non owner occupied properties on fixed rate traditional 30y mortgages? 

City National Bank has a $50K grant program for homes in certain neighborhoods.

And does his bank accept it? 

The vast majority of "regular" or traditional (Conv/Govt) mortgages are originated by specialty lenders and brokers and are sold in the secondary market to provide yield on bank balance sheets (think Chase or BoA) or to be securitized into MBS.

Your lender will have the exact details.If the current leases don't align with your timeline for moving in, another option is to explore a DSCR (Debt Service Coverage Ratio) loan or a traditional investment loan.

You may be able to get a levy against their bank account or file a wage garnishment without the need for going to collections.