If tenant acts in bad faith by withholding last months rent because they think the "deposit will cover it", they are liable for 3 times the monthly rent plus attorney fees.If the landlord acts in bad faith he is liable for $100 fine, 3x the amount wrongfully withheld, and attorney fees for the tenant if the tenant brings a suit. 

Either way less than a grand isn’t worth a law suit for either party.

I have been searching the internet for a form that suits our situation, but I have not found anything, am I looking for the right form or should I be looking at the Notice to Quit form?

As a start, J Scott's Book on Flipping Houses, David Green's Long Distance Real Estate Investing book, and a lot of time spent looking at pictures of other people's rehab projects (on Deal Diaries here, or Instagram, or wherever).

Completely renovated in 2018, these modern units feature beautiful luxury vinyl plank flooring, all new interior doors and fixtures, new cabinets with a soft-close feature, Whirlpool brand stainless-steel kitchen suite and granite countertops throughout.

Almost everyone of them becomes a HEY SUIT ME list,In Illinois Choose a business entity to direct the properties.

I agree that this can be counter productive if done around a suit filing though.Regarding LOC, it's likely that you can't withdraw from LOC around a suit filing.

A contested foreclosure and the hearings etc. can easily surpass thatWhere borrowers file counter suits I have heard to expect to spend $40k if it goes through fruition and there is discovery involved 

You’ll find the one that suits you the best.  

One rule doesn't apply to all investments or all cities when buying an investment property.Start by figuring out how much you have to spend, then decide what type of investment property you want: do you want to buy a house for you to live in and rent out rooms, buy a single family home, multifamily (duplex, house with a suite, etc), and what type-more of a starter home, turn key, something that needs a bit of work.Once you have an idea of what your mortgage payments (assuming you are getting a loan) would be, that will give you a better idea of what you are looking at.  1% is a rough number (I've never used it) because it depends on your costs (mortgage, taxes, etc) and the actual rent, you need to look at the actual numbers of the deal.