They may "forget" to tell you that the tenant paid a double deposit, and then not transfer that deposit to you at closing.Your offer to purchase should include a requirement that the Seller provide all documentation and agree to sign an estoppel certificate (also called an estoppel form or agreement).

.- Im thinking of not charging security deposit because of all the strict MA laws and just using the last months rent as a sort of security deposit, thoughts?

. - Collect rent every way possible including letting tenants deposit cash into a bank account.

In our24 years of experience, managing almost 100 S8 leases currently, the average S8 tenant has a FICO under 580, numerous collections from utility & cell phone companies, doesn't want to pay a security deposit, much less an application fee and claims they don't know how to fill out their S8 paperwork despite being in the program for several years - hint: they want YOU to do it for them.Most, not all, are eligible for government assistance due to a funeral-march of bad choices.REALITY: you are trust trading one set of problems for another.You can succeed with S8, but you need to understand the challenges and plan accordingly.

The company doesn't really have a "credit score" or "eviction history" so I'm thinking about asking for 1.5x or 2x monthly rent as a deposit (we normally do 1x month rent) just like I would for a tenant without established credit history.Thanks!

An estoppel is just a verification of rent and security deposits.

I think that is why I found the deposit so appealing because they would handle all of the above, seemed like a better way for REO agents. 

.- Almost impossible to get any kind of unit damage paid for beyond what you have in a security deposit The rest of your statements about the homes needing a ton of work, contractors costing the same, and dealing with properties that are very tough to force appreciate are spot on.I personally do not invest in Section 8 housing anymore because they are normally cash flow purchases.  

Seller disclosed leases and may have kept half of deposit.

Or for Closing cost, Ernest money deposits, etc.