I'm wondering the best way to handle applications and collection of application fees, as well as selecting the most qualified tenant.

After getting under contract, it was brought to our attention after requesting copies of the leases that the current owner did not put the tenants under a physical contract, nor did he collect security deposits.

What am amazing resource.  

Collect rent. 

There are tremendous resources on this site for you to use.Attend local REIA meetings and connect with like-minded investors: https://www.biggerpockets.com/forums/521-events-and-happeningsRead the Beginner’s Guide: http://www.biggerpockets.com/real-estate-investingListen to the BP Podcasts:https://www.biggerpockets.com/podcast

I can collect/screen tenants via Cozy.co.

I know it is common to use 10% as a vacancy factor when trying to model performance of an asset or a collection of assets.

What I do is offfer my angry tennants the opportunity to get into real estate investing, offer them work in maintaining properties, collecting rents, and offer guidance on them being able to buy their first place of their own.Don't you think they would love to have at minimum two jobs to be able to save up the money , work their ends off to build up their credit, hunt down deals, and negotiate a purchase, invest their money knowing there is no guarantee of ever getting your money out of it or of profiting, have to spend thousands of dollars or 10's of thousands of dollars, even hundreds of thousands of dollars in order to be a ble to provide others with housing?

Hi Amber and welcome to the great resource that is Bigger Pockets!

Similarly; if you've put your money into a project and the project is in jeopardy of going sideways, you're more likely to lean into it and get it done and either sold or rented vs walking away because you're losing someone else's money.They also don't go to 100% because it costs money to foreclose and if they're already at 100% loan to value, they lose money if they even have to enlist a collection agency much less foreclose.