Comparable properties in the area are selling around $1.4m+, and every house in this neighborhood is selling over $1m+, so I figure there's a lot of wiggle room for profit if bought at the right price.My initial problem is that it requires a $100k deposit to join the auction, and starting bid is at $280k.

They want to terminate the lease (month-to-month lease) and use security deposit as last month of the rent.Problem is there's no security deposit in the lease when I got this property from previous owner.

Is there a way to extract this from the security deposit and then have them update the security deposit at the time of new lease signing?

As such, I reimbursed the security deposit to them written to "The Estate of Tenant's Name".

After we agreed on a number, we moved forward with an agreement of sale form and deposit to the title company for escrow. 

I would assume there is an early termiantion fee and the possibility of not receiving your deposit back, but you need to read the lease.

They will send you paperwork to fill out to prove the ownership and enter in your direct deposit information for payment.

What does your contract say about deposits?

Most these options are done with an on refundable deposit that you can use for your next property if you want to refinance.

Collect last month's rent now and keep the security deposit too by telling her it's the only way you'll lie for her to this apartment manager.