I have selected one out of the three and want to proceed with lease signing and security deposit collection.

THEN had to pay the city to come out and reinspect whereby he noted the deck panels were not secured.

So, there is no established incoem stream at this time.In addition, the friend hasn't secured a job in town just yet so there is no income stream there either.

How do I handle the lease, the security deposit and any additional rents.

I've heard I could take a second mortgage on the property as security for myself? 

Terms of Consideration:In this mutual termination, both landlord and tenant agree to the disposition of deposits and financial responsibilities in the following manner: Landlord will return security deposit by June 6, 2018 less damages caused by tenants, missing items and outstanding utilities/water bills.We'll fill in the terms later but do you think this is good enough? 

Do you guys keep security deposit in a separate bank account and if so what kind?

PENFED said that they won't give HELOCs/Equity loans on investment properties when you own more than 3 and Chase said they only give up to 50% loans on investment properties if they get an exception to loan on an investment.I thought this was part of the BRRRR method? 

Your only safeguard is the value of the property which is security for your investment.

Are there any security lights?