I recently acquired a property in Michigan and a former tenant is now claiming that I owe her the return of her security deposit.  

Here the property manager may be glad to pass on the oversight to someone with more experience in the oversight of the project (but this may be beyond your scale or match it).

My question is does the investor deposit the money into my account or are they supposed to wire the money directly to the title company?

Basically what title says, I've looked over craigslist but some shady deals/areas, 600/month cash, would like just a bedroom and a bathroom and a kitchen to cook food.doesn't matter if its a shared bathroom, I don't drink, strictly on buisness, would be month to month, I can put down a deposit, and would do a lease if it made you more comfortable. 

Mix and match like that if you have to.Good luck!

They claimed to have a buyer for their home and gave me a $1000 earnest money deposit which i haven't cashed.  

Once you have the fee, you can see if the other one will match or beat it!

Once it is fully up and running, however, it's going to be a seamless transaction and I won't have to mess around with getting a letter from each tenant, going into my banking app, taking a picture of the checks, depositing the money to my account, holding the checks till it gets deposited, cutting up and throwing away the checks, and then doing that 5 times... 

& that is exactly why we rarely have any downtime & we have been doing this a LONG time.In fact one 1970's style SFH was shown & taken with all deposits BEFORE the rehab (pic below) was complete. 

He is requesting to hold all security deposits which I am adamantly against both in liability and just overall pain in the rear.