Also make sure they haven’t pocketed security deposit.

There wasn't a need to have robust documents, just what was needed for a note and deed of trust to secure the investment.Selling to an owner occupant, I would definitely let the MLO take care of everything.

Pick a certain percentage of yourTo answer you, we do already have some investment rentals that are doing fairly well (handed off to PMs now), we had used house-hacking methods to get these going and did fairly well.

The bank views a year lease as less risk for them and a form of stability which as investors we know doesn’t equate to security in the real world .

If I purchase it with my husband’s IRAs, and if he does the landlording, then could he could take withdrawals, which would then pay social security taxes, on right?  

As security for the seller, I would then of course put her in 1st position lien holder with a mortgage.

You should definitely weigh vacation rental vs other methods. 

There's a lot of red flags on this and I would personally move on.If you still want to pursue it after looking at their background and credit report, might I suggest  a higher security deposit or pet fee up front.Still, there's always better tenants out there for you.

Make sure you check your local/state laws on late fees and security deposits.

I'd suggest researching the different types of investing methods and then choosing one that interests you the most and mastering it.