Personally, I have found occasional private lending to be a good networking tool and lead generator for what I'm really looking for - properties I can develop. 

My inherited tenants ALL SMOKE and none had security deposits. 

While I secured the initial financing for the property, I have two other partners/groupings (a total of 6 people) that are contributing to the closing. 

Some opt for private lending to avoid this tax and still have investments secured by RE.   

Most likely, the only way you will find something like that is through private lending with friends/family.What is low money down to you, percentage wise? 

Investment Info:Small multi-family (2-4 units) private money loan investment.

But if do a BRRRR from far away that's risky too, without a really good and trustworthy team in place and lots of checks and balances (security cameras, someone local to check on your property) and the ARV and refinance aspect can be challenging.  

Consider learning about wholesaling, seller financing, or leveraging private money or hard money lenders for your flips.

If you love your job, make good money from your job, have very little time, and have cash want to park into a secure real estate asset, turnkey is the way to go.If you are opposite of that and want to dive into real estate investing operations, then fixed upper and BRRR.

The security deposit should never be used for anything during the lease.