You can request additional security deposit but new laws affect how long you can keep that, I believe only one year but you will need to independently verify this.

@Jessica Tomlinson  I've sent you a private message to get a little more detail. 

I've sent you a private message as I am also living here in San Diego and interested in getting into RE investment.

I recently came across privatemoneygoldmine which has lists of private money lenders.

I am ramping up on this very quickly.Cultivate some private lenders (or hard money sources)Keep learning everything REIf you are a potential private lender or hard money lender I would love to talk to you as that is the next item on my checklist to figure out.

If I decide later to start a construction business (actively building and selling new spec houses), assuming this is taxed as ordinary income with social security, etc and treating the homes as inventory - if you build a house, then sell it, then spend that money building a second one, but don't sell it until the next year, then sell it, then build another, can you effectively push off the taxes as you are rolling the sale proceeds into new inventory costs / construction costs? 

Your property your rules, you can do whatever you want but if you are looking for a "fair" solution you can split the yard with a fence so you each have your own private space.

@Paul Daniels those are the two methods most often used, but if you do not want to go conventional or hard money, you would either have to go with private financing, or using some personal lines of credit you may have.

I am interested to hear people's advice on either of these approaches, or even the possibilities of teaming up with a private investor to help with a portion of the down payment.

Also, I'm in a very small private real estate investment group that is looking at purchasing property this year.