@Scott Ellis The simplest way to solve your issue is draw down on the LOC or Heloc either one and deposit the money into your savings account.

I've posted a few articles below which outline the new and most restrictive ("progressive") rental laws in the country, which limit the size of security deposits, non-refundable deposits, and requires giving tenants and option for a payment plan to pay move-in fees.

I did not and refunded the deposit and sold it to somebody else.The buyer got "cold feet", literally.

Going with a TK to get started is a good way to get instant cash flow.  

I'm wondering if I should establish a separate banking account in which to make deposits and let the bank draft the mortgage payment from that account. 

We will be renting a SFH to three college students beginning in May, and would  like input on how to set up the security deposits.

Make sure your security deposit is max allowed and screen well if you take on a tenant.PS - What are your lessons learned for flipping a home faster?

(You get a security deposit, utilities in his name, etc.)

There is a small security deposit given by original tenants that I hold.

I would say you need to plan for the following to happen to you during the next 15 years:- May need to drop rent by $200/month for a while due to market conditions- May have 2-3 months of lost rent due to vacancy and/or eviction- Broken garage door opener, hot water tank, furnace, or appliance requiring a repair man and possible replacement- Need to replace carpets or re-paint the entire unit and it's not covered completely by damage deposits.- HOA fees and taxes continue to go up every year but may not be possible to increase the rents due to market forces.If you have a good W2 job and you can hang on for 15 years and cover these situations I would actually say you should keep the place!