However, I've never done a rooming house before and wanted to know the best way to handle security deposits and how they may be applied to damages in the future.

No evictions but one left my house in such a bad shape that even after security deposit still owed thousands.

Bank security is pretty f'ing high. 

@Ramon Mota  It's really the same as a normal RE transaction except you provide the financing and not a bank.The buyer gets title and ownership and you place a lien on the property, securing your interest. 

Once you officially start the process, based on your assumptions, your tenant will be forced to deal with you on the issue or face eviction.

.), fencing and security systems, and numerous other factors. 

Also, if something significant is revealed during the inspection, and you want to trade remedying that issue for a vacant first floor, that could be an option, but the issue should be material and not exaggerated, and the seller should have the option to remedy the inspection issue instead of making the trade.Lastly, and somewhat unrelated, you should always require that any security deposits, and interest accrued on such deposits, be passed on to you at closing.

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.

In either case, you want to pay off the HELOC as quickly as possible to secure your equity in the property and recycle the capital.

It's the second biggest cronyism in US history, even social security isn't as bad as all that.