The buyer was FHA and the lender found out later about the 90 day flip rule so had to close and reopen the file again.

Just kiddin'.Anyone going through foreclosure has several things going on: 1) They are under a lot of stress, 2) Everybody is mailing to them and knocking on their door, 3) They are embarrassed, 4) They feel helpless, 5) They have the belief that winning the lotto will bail them out at the last minute, 6) It's the bank's fault, 7) This can't be happening to them, 8) They don't want to sell, 9) The house (even though it has a leaky roof and hasn't been kept up) is worth more than market price, 10) Believe you are there to take advantage of them, 11) Believe the government should do more to protect them, 12) Believe that their payments reduce the principal directly proportionate to their payment (Have no concept of compound interest, what Einstein called "the 8th wonder of the world"). 13) They can file a Chapt 13 bankruptcy at the last minute and keep the house if they have income, 14) They will wait until the day before the sale and call you if none of the other solutions work.Your opening comment should be " I buy houses in the area and I was wondering if you or someone you know might be interested in selling".

Could we deduct 50% of the security deposit as a new tenant placement expense when the previous tenant breaks the lease? 

I've been curious to know if you had to go through a title company to set this up, since I won't be actually filing anything at the courthouse or transferring title.

Just looking at timelines, since we wouldn't receive the bill until after the security deposit was due back to the tenant after move-out.Thanks, 

I'm sure the owner filed taxes, so you should be able to get those income and expense reports.

What are you guys using to secure your vacant properties?

The BiggerPockets community has served me very well in helping me find good contacts for CPA, Attorney, and RE Agent, so I am hoping for some leads on this topic as well.I don't want to have to go through my attorney and file a lawsuit just to get my Insurance to pay on a valid claim.

@Jake Parks - If you're pooling money together and providing a return for people/there is an expectation of profit for someone else and that other party is not involved in the decision making/management of the deal , then you are creating a security and the answer to your question is a resounding yes.The big thing you have in your favor with partnering up with family and friends is that you have a relationship with these people already and that's the biggest thing that the SEC is looking for.

Both sides are leased at low rent with no security deposit.