Diego, if you can, I would go see a Legal Aid attorney and see if they can help you recover your Security Deposit based on tenant/landlord law in your State.

I do have his full security deposit of $630 that was transferred to me from the previous owner.This is my first rodeo and I'm not sure how to proceed.

Be sure you get credit for the security deposit at/before you close.You're right on the lease.

Make sure the cash flow is secure with high quality tenants.Eliminate all personal debts.Secure your personal income streams (work / education / skill development) for yourself and your family.Leave yourself a cash emergency fund that can cover a year's worth of all personal and real estate expenses.These first few properties should be completely paid off.

Most administrators will dump RE converting to securities for better asset management

It's all about the money.Many bought the belt line with grants, TAD bonds etc. in mind to develop the land.

I've incurred some expenses with inspections, rental business license, some repair work done, and installed a security system. 

I've been reading the mass.gov literature and have pretty much decided not to mess with security deposits if I can help it.

Too many other states where I can get great returns and have them out in 3 to 4 weeks time for the whole process.Are you allowed there to require large security deposits or advanced fees to cover such a scenario??

You need to be financially secure before buying all those nice liability things.