Think of all the things that could go wrong and see if the lease addresses them: unauthorized pets or tenants, early termination, security deposit, lease violations, late rent, eviction, lawn maintenance, parking, etc.5.

The P&L is a mess, with Security Deposits listed under income, the house, car expense, car insurance, Contributions (Whatever that is...)

We don't use security deposits and instead use move-in fees. 

Low earnest money deposits aren't uncommon.

Getting that check automatically deposited on the first every month sure is nice !

When speaking with him in April, he agreed to send over the security deposits and cash reserves he was holding, as well as the tenant leases and contact info.

The only issue is if you are a Real Estate Broker, you cannot co-mingle deposits and personal money.

Make sure you get the security deposits, prorated rent for the month, the lease agreement is correct and they know who to make the rent payments to.

What is done with the deposits that the current owner has collected, so that if I buy the deposit refunds aren't coming out of my pocket if a tenant moves out?

@Canesha EdwardsFrom my understanding do hard money requires a large deposit to just begin working with them.