IMHO in order to secure the best terms, you'll want to stick with W-2 for the purchase.

They could also use the bathtub to dissolve the body of their grandmother while they continue cashing her social security checks.

Here's how you can structure it:Contingency Clause: Include a clause in your offer that states the purchase is contingent upon securing a lease agreement with a tenant within a specified period.Time Frame: Define the time period within which you need to find a tenant.

What damage could it possibly cause that their security deposit wouldn't be able to handle, worst case scenario? 

don't worry about securing a mentor. 

S8 Challenges:1) Voucher holders not having funds for application fees or security deposits2) Tenants trashing properties, killing ROI3) Tenants not paying their portion of rent or utilities4) Tenants not cooperating with ongoing S8 requirements or inspectionsAlso, you stated in your initial post that you'd be buying turnkey rentals.

I am looking for advise .We want to move away from security deposits and charge only Move-In Fee.

We were unable to secure offers within a reasonable price point.

Here's what I was thinking...Can I ask him for a deposit to hold now that will then be used as his security deposit? 

I do not think it only matters whether you were an employee or an independent contractor- I believe most states would look into how the security deposit funds and rental payments are held/ by whom.