Should I require both of them to pay application fee or only one fee?

Obviously, if the tenants fail to timely pay rent, you can enforce their obligations with a notice to pay.Your question is legal in nature, so I recommend that you consult your landlord or FHA attorney in your state about it.

The first approved applicant is offered the rental and I give them 24 hours to pay the deposit and sign the agreement.

s mentioned JV is best initially ..always pays to be circumspect and cautious the first few, once you gain confidence all alone is good to go!!

BRRR deal could get you the cashflow and the value add payout without having to pay capital gains on the equity.If you’re not fatalist with the Multifamily Wealth podcast with Axel Ragnarson I’d highly suggest checking it out.

They say the next door neighbor was renting it (stop paying) for storage and continues to use it.

I haven’t seen it personally but I imagine it’s some kind of “use us to sell or pay a penalty” clause. 

The same tenants that didn't pay you rent while they were residents likely won't pay even if you get a judgment against them.For better or worse, this is the nature of the business we've chosen!

The current owner pays $4K per year. 

Downsides are that he gets none of the potential upside when the property may be sold down the line, and we have to find a way to ensure that we build enough equity in the property to do a cash-out refinance when the loan term ends to pay it off.