My friend recently told me of this scenario where the person I lease to would perhaps then double book individuals and keep deposits. 

Lots of posts here on BP on all the questions to ask as there are 100+ items to consider

I've had a couple of deals in the past that could have died at the table, but I let pragmatism rule the day and it worked out just as it should in the long run.

Next, I'll be pivoting into subsidized housing investment and collecting rent $ from the government as i truly do believe this is a way to boost CoC return percentages in today's market.

VA and FHA loans are basically the only assumable ones in the market place.

Divide that number by $538,000 ($1.15 - $612k) which is 8.5% as is.

I'm under the impression that its ran similar to single family homes and like cap rates for the large multifamily.

@Sherrie Wilson thats a lot of extra money for the cool factor.

Also the new owner has the advantage of screening their own tenants and signing leases at or above market rents.

If she wants to protect herself, tell her she can record the inspection with pictures, and you will give her a signed copy of the inspection sheet.Honestly, if you anticipate the charges to be less than $500, I would refund the deposit and be done with her.