If a prospective tenant can't come up with security, first, and usually last months rent they're not getting the keys to my property. 

I came out of the first training just implementing the techniques learned and closed a deal a week for like 7 weeks straight.

Some people like to have a separate bank account for holding security deposits.  

@Felicia Richardson - Do you keep the security deposit funds in the same account at which you also receive rental payments?

@Josh Lewer really appreciate you taking the time to share such a thorough breakdown and even pulling in excerpts from the IRS Audit Technique Guide — that’s a wealth of information and I’m sure it’s helpful for anyone following along in this thread.Just to clarify the lens of my original question: I was thinking more from the perspective of an investor who is personally handling the day-to-day operations of their rentals (rather than delegating to a property manager).

@Sandra Uwantege Hart what @Chris Seveney is trying to communicate to you is, did you follow ALL the Louisiana statutes regarding the handling of the Security Deposit?

Then all 3 of the following: security deposit, renters insurance and damage insurance? 

Just put it in a designated account that is only used for the security deposits. 

Subject To (and other creative financing) is an advanced technique, that while powerful in the right hands is a disaster in the wrong hands.  

So, we would be able to charge a tenant rent for breaking the lease if they didn't give proper notice and moved out. 23 Carpet Cleaning: we charge a $x Cleaning Fee to avoid Michigan Security Deposit issues regarding, "normal wear & tear". 4 & 17.5: we have similar language in our lease, but eviction fees are legally limited in Michigan:(10: This is too vague for Michigan judges and highly likely to be struck from the lease.20: Would not stand in a Michigan court as, "if it's not in writing, it never happened".Again, this should in no way be construed as any type of legal advice and is our opinion only.