She gave a deposit of $765 but smoked in the unit for 2 years.

Do you have the cash needed to pay the attorneys fees, and the cash needed for the due diligence Inspections, and the cash needed for the earnest money deposit, et cetera.

Security deposits soften the blow of tenants that stop paying or vacate before end of lease.

How do you file a judgement against a tenant for damages beyond the security deposit?

If the rent is deposited into your account then you have accepted payment.I use apartments.com and zillow to handle payments - they allow you to block payments.This won't help you this time but in the future your lease should specify how they are allowed to pay rent, specify payment options that give you control over the payment.

The security deposit is capped at 1.5x the rent.

In my area tax auctions don't have deposits.

You have security deposit and it's something you can now incorporate into new leases.

Banks requires (2) months copies of your checking or account for the down payment.If you get the cash into the account 3 months prior it will "not" show as a large deposit that you have to source and show it came from a personal loan which then causes no issues in underwriting.

What is also very common is to charge a more aggressive security deposit or do a regular security deposit plus a monthly Security deposit alternative on top of rent to ensure you are properly Collateralized.