Is this a good or bad idea?

Lots of other people had bad experiences. 

Indeed, to stay in compliance with fair housing, you need to treat each tenant the same, so that's something to keep in mind. 

Maybe not as bad if not in a beach town?

Real estate investing works out best when treated with a crockpot approach instead of microwave. 

In the really bad cases they disappear to another country and try getting them to sign stuff at an Embassy abroad. 

If the money is not held according to local landlord tenant law and/or was was spent (either intentionally or unintentionally), that act would be treated as an exclusion no different than under any other insurance policy.

Bad, real bad, respirator bad.

no one killed that we know of so far but several injuries and a few neighborhoods hit pretty badly. 

I usually try to get 10k but sometimes its not possible and I would prefer to make something and give the investor a good deal rather than make nothing trying to move a bad deal.