Unfortunate this tenant has never been changed a security deposit by the previous landlord.

As a side note: The cost of simple repairs and maintenance is paid out of the Operating Bank Account.Other Savings reserve (fund this account monthly with in an amount to cover contingency matters, such as vacancies, etc.)Security Deposit reserve (transfer all Security Deposits to this account).Other reserve accounts may be set up for other matters, such as Tenant Rent Deposits.To clarify matters, there is one Reserve Bank Account. 

Also this partner would be contributing most of the capital for the purchase, and I would be doing most of the work, is it possible to set up the TIC so that the partnership would be split up 50/50 like this, or does it require that % ownership match capital contributions?

Many non-deposit mortgage lenders will charge just a flat fee to originate a loan. 

@Bruce Woodruff  we have a checking account that my partner deposits the money into at the beginning of the rehab and I have a debit card and check book that I write checks out of to pay contractors/subs and use the debit card for materials.

As such, the interest would be paid to us and would have to be claimed.Others are telling me that if I simply have the insurance company deposit the cash directly into the LLC bank account for the loan, then I treat it as such, then the interest paid is deductible without claiming it on my personal side, because the interest was paid to the insurance company...not to me.Any information on this would be greatly appreciated.

You can then deposit them at the right time. 

The bank will pay attention to where the money came from though, so if you need to split the downpayment, you may want to get that money deposited (or "gifted") to your partner well ahead of time. 

I haven't looked at how to deposit those - I don't like mobile deposits.There are many free resources to use before you start paying for services.

So you’re selling a paid off $700k NET (after all selling costs you will deposit $700k with the QI) and you’re buying a property that will cost you $700k net (mostly list price but a few added costs)?