The seller gets to have some kind of return on his money instead of putting it in the bank, his money will be secured by the property so if I default, he can take it back, he gets a check in the mail each month during retirement, and I don't have to move into a 1 bd/ 1 ba unit with my family.

We decided not to enter into a lease with her but wanted to know if we must return all, part or none of her Security deposit?

As a loan officer there is a lot of things about the lending process that you know that the general public doesn't.

@Nikki O.You've asked about a zillion very personal questions in a public forum. 

Thank God for what you have and invest to secure your family's future... don't do this so you can blow your money on top dollar worthless items.

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.

According to David Greene’s book, this is public information.  

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.

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.

Real estate commissions were created specifically for the purpose of protecting the public from situations like this.