The main issue with multifamily STR deals is financing.

We had an inspection done and and then negotiated the price down to $197,000 from $250,000 based on the fact we would allow my husband's step dad rent a room during ski season, the faulty roof, and other issues with the property.

As a parent to do this for a child, it is only acceptable if the child has a documented disability which prevents them from being able to work/ earn income.if parent/borrower is in one state and the child is in another state, i don't think this is an issue.

The issue is he needs one with 10% down vs. the 20% that we're finding, if that exists.

Feel free to tag me if you ever have more questions on the topic.

Pre-screening can lessen the number of unqualified applicants and lessen this issue, but when a landlord decides their process they usually choose whether to pre-screen or not based on their own needs and saving their own time and effort not for the benefit of the tenant/applicant.

Where I had issues was during construction and getting the checks from the lender.

I recently ran into this question with my remote multi-family property so want to see whether people have any thoughts or what should be normal practice.I hired a local 3rd party property management company to help me monitor operations, manage payrolls, and handle issues for my remote multi-family property.

I can link it directly to you if you hit me up in the direct messages. 

Quote from @Joseph Milano: I would talk to the renter to see what they want to do.The easiest method is to get tenant's permission to apply the funds toward their next month of rent.If they prefer the money back, I would issue them a check, money order, or cashier check when they sign the new lease.