They also absorb many expenses that the tenants could take on, such as a few utilities, background checks for applications (they pay a lot for this a year), and damage out of deposits at year end.NOI under new management could near 70k with savings for 7% vacancies, 7% repairs, and 4% CapEx (due to many apts in just 2 buildings).I'm interested in trying to figure out how to schedule a payback period in excel, if anyone has number crunching experience with that for 1) the loan, and 2) the investors downpayment.

How would you recommend handling the move-out inspection and return of her deposit?

@Tarold Davis1 (lining someone else's pockets) and 3 (non-refundable deposit, higher than average rents on a house you may or may not purchase) waste money and you don't own anything.Option 2 gets you want you want for your kids and doesn't tie up your money.

They are lucky to have saved First and Last months rent with the Deposits on Light, Water and Cable and still have a JOB, in order to move on to the next Apartment or House.

Students are really BRUTAL on properties so plan on using quite a large portion of the security deposit going towards repairs and expect the house to turn over to to new renters every 1-2 years. 

@Sean Cole  it so very different your seller is the Sherriff or trustee service in our case.. your buyer is someone who is bidding... and puts up a significant non refundable deposit.Or like in the case of Indiana its a felony to bid on a property and not follow through.. not only do you lose your bid deposit the Sherriff can have you arrested. 

Or do they expect some sort of earnest money deposit in the form of certified funds and then you have some time to bring the rest of the money?

I see a lot of problems with how landlords assess applications and decide on deposits that could cost them a ton of money down the road. 

its difficult to finance and maintain compliance with state law regarding use of deposits, etc.

She must give you a downpayment (more than a normal security deposit).