I am nervous to take the money from the security deposit and not have them replenish the security deposit in the case that they damage more things in the next year and then I am left with a smaller security deposit that may not cover more damages the following year.If I charge them for the damages at the moment that I see the damage, how long do they have to pay for the damages?

When you have the reserve, the PM company pulls from that to pay for minor repairs, and then replenishes it when the next rent check comes in. 

But we thought we'd focus on some flips this year to replenish the coffers.  

You will either have to pay it off or refinance to replenish (Cannot remember the actual term) the entitlement.

If you're using your investment cash to live and do not currently have stable income, I suggest to wait until your cash reserves are replenished and you have at least 6 months of stable income (w-2 or 1099) to begin working with a lender. 

I replenish it after a major expenditure.

so i have a section 8 tenant in one of my rentals. she is a good tenant. about a month after she moved in we had the plumbers come out and roto rooter the main line leaving the house. i didnt mind. the cause for this instance could have been anyones, not to mention it hadnt been cleaned out in a few years. no biggie. 5 months later i needed to call out the plumber again. this time the main cause of the plug was someone was flushing down those sanitary wipes, which are not biodegradable. this is purely the tenants fault obviously. bill totalled $300+. she has no way of paying this as she stated. housing authority has her locked in for 2 years from begining of the rental contract. i dont necessarily wanna give her the boot, but this is a business. my real question is: she wants me to take it out of her deposit, then she claims she will replenish the deposit once tax time comes around, around feb- march 2013. is this legal for me to do?

With BRRRR, we´ve regularly replenished our HELOC so that we can continue investing.

I've seen a few deals in the $1 million range come across, but I'm wary to lock up financed capital with it likely being in the deal for a few years (until cashflow could replenish).  

If so can you immediately draw from the working capital immediately for maintenance expenses then replenish monthly when needed?