I absolutely collected first, last and security for my class-C rentals until NYS prohibited that practice back in 2019.Many tenants cannot manage their money properly, so this mitigates the issue of not being paid last month's rent when they need to move and the new landlord is receiving those funds they have allocated for their housing during the last month of their stay.This was also helpful to me to pre-screen who has their financial house in order and had saved for their moving costs as part of their planning.If I still could, I most definitely would - without exception.

Owner-occupied transactions are mostly emotional decision based.Investors should check emotions at the door and only make business based decisions.What does that mean in practice?

Is that standard practice to have to do this, or am I missing a trick or a different loan type similar to a HELOC? 

google All inclusive Deed of Trust state of CA.. that will give you a really good description and if you can find the actual deed of trust to read its a great wrap document .. in practice   you have a current 100K loan at 8%  you sell by owner and take a 125k note at 9%  the 125k wraps the 100k.. you continue to pay on the 100k the while the new owner is paying on the 125k  payment lets say on the 100k are 1k a month the new payment is 1.2k a month you make the 200.00 delta..

That approach seems like it would reduce the chance of deals falling through, and I can understand why it would be standard practice.

I should have clarified some of the things you pointed out though as that is common practice buying a STR anywhere to verify what permits you need and how to operate legally in the city.

I bet that translates into other good practices, like fast response times when people reach out to you.

We have both a realty practice and mortgage practice.

A title or escrow company cannot likely help you since there is no actual transaction happening and we (escrow and title) are only permitted to perform the act of deed prep for transactions, otherwise, it is considered practicing law.Here are a few options to help with the doc prep and recording:https://recordmydocs.com/https://directlegal.com/e-record/http://docstarservices.com/

I'm not saying that the increases have to be as drastic as the example I shared but you should be in the practice of increases to keep up with costs.