In order to mitigate risk, I asked that they provide 3 months of security deposit funds under the pretence that if they pay on time for 12 months I would refund all but 1 month or just apply the other 2 to their rent due. 

The easiest and simplest methods I've seen again and again are either posting on CL or searching around CL to find the "We buy houses fast" kind of guys. 

@Jordan Beckett I run a YouTube channel focusing on different methods of investing and made a video on Feb 25th about a house I had seen in Roseburg for ~44k surrounding houses are 100k+, talked about rehab costs and such looking ~25-30k and reappraising above 100k afterwards.  

hi everyone, I need to know if I should bother with background checks and security deposits fur a garage rental?

you have to be positive that the numbers will yield profit for all involved parties. if you aren't sure of the exit strategy or how you will secure funds then you still have a far way to go. do you have cash buyers with verifiable proof of funds lined up?

I am sure the seller figured if you could come up with $400K and with the property to secure the loan, that the risk was low.

My thinking is that even though I won't be getting a great return (5-6%), I'll have 100% equity that will allow me to easily secure loans in the future.  

We have a line in our lease addendum that states if the tenant wishes to break the lease that they pay a one time fee equivalent to 2 months rent and forfeit their security deposit.

Less security and harder terms for your buyer from a lender when you sell.The real test on the strip center is the quality of the location and demand for a spot.

When tenants move and I return security deposits, should I divide the deposit equally among the tenants and write a check to each tenant and give an equal amount?