Your home is a secured debt.

If you're looking to secure any financing they will want to know more specifics as well in what you are trying to acquire. 

Tell them if you perform the punch list now that they will get their security deposits back sooner. 

You stated that you inherited this tenant.Did you also inherit their security deposit?

talk to Peak Asset Lending in KC  @Alexander Felice  banks generally wont fool with stuff this low unless you have existing relationships with them.. the cost and risk of having a default far out weight what a bank can make on a 15 to 20k mortgage.but i have seen small local commerial banks do these for local citizens that own 10 to 50 homes and its their cottage industry so to speak

That event is heavily weighted to seller carryback investing rather than NPL investing. 

If you are already buying under market value, the cost of repair may be worth taking on to secure the deal.

As long as the numbers work, it will be to your benefit to secure as many units as possible with that cheap 30 year traditional financing while it's available to you.

My Chase Business savings account pays negligible interest, and I would like a higher interest bearing account in which to place security deposits so I can keep the interest (in Michigan where this is allowed).Where is a good place to put security deposits to get significant interest? 

And violating the lease would mean they would loose their security deposit.