There are criminal penalties if folks screw this up, so anyone contemplating raising money from others should strongly consider getting the advice of a securities attorney before proceeding.

I know of a few brokers who seem to partake in this sort of behavior but it's a risky endeavor.I will ask a commercial broker at my office on Monday

Similarly, a policy or practice that does not consider the amount of time that has passed since the criminal conduct occurred is unlikely to satisfy this standard, especially in light of criminological research showing that, over time, the likelihood that a person with a prior criminal record will engage in additional criminal conduct decreases until it approximates the likelihood that a person with no criminal history will commit an offense.  

What do you all think about the recent HUD statement that says refusing to rent based on a criminal record is a form of racial discrimination, due to racial imbalances in the U.S. justice system?

They will look at if license laws were broken and criminals acts committed.

In both civil and criminal court?

Renting to a friend of a friend is likely going to be a very bad idea.Roommate situations often end up in a disaster.If you insist on doing this, besides worrying about the security deposit,  include a very thorough screening on this person; credit check, criminal check, review of past rental history, income verification.And a WRITTEN lease outlining the specifics of what the two of you expect from each other is a must.Gail

So we finally found tenants that have good income, great credit, no eviction or criminal records, and plenty of money in savings.

We will be performing criminal and credit checks on all applicants.  

Cheap doesn't equal good investing...you have to remember that we are in the human behavior industry...the property is merely an extension of your tenants.Best of luck and let me know if I can help!