The security deposit should never be used for anything during the lease.

If your DSCR has improved or market rates have dropped, refinancing might secure you better terms and improve cash flow.

While I secured the initial financing for the property, I have two other partners/groupings (a total of 6 people) that are contributing to the closing. 

But if do a BRRRR from far away that's risky too, without a really good and trustworthy team in place and lots of checks and balances (security cameras, someone local to check on your property) and the ARV and refinance aspect can be challenging.  

Are you priced fairly and have a low security deposit?

You want to make sure that asset is secure.

We know we want to create an llc but is it difficult to secure a loan?

If you love your job, make good money from your job, have very little time, and have cash want to park into a secure real estate asset, turnkey is the way to go.If you are opposite of that and want to dive into real estate investing operations, then fixed upper and BRRR.

My inherited tenants ALL SMOKE and none had security deposits. 

Our battery went out and our son had to crawl through a basement window but I doubt too many people could have done that, he was impressed by our increased security but didn't want to drive 2 hours back home so he found a way.