Normally the investor will have to make this attractive to the PMI Company by placing a large deposit towards the purchase of the property.If the lender sees that the borrower has equity and is making serious efforts to market, the property the lender will generally delay foreclosure for a reasonable time to allow the property to sell.The lender will probably require the borrower to make full or partial payments during the marketing period to keep the overdue balance from growing.You as an investor can front all the cost as part of your purchase agreement.

Normally the tenant will initiate their payment, it will take 3 or so days for the payment to withdraw and another 3 or so to deposit into our account.

The vast majority of lawsuits against Landlords are for wrongful eviction, security deposit disputes, and Fair Housing Violations.

Secondly, how do I deposit the Security deposit into my account from Venmo in order to keep it separate from my other funds?

Your enforcement remedies under law are: 1) deliver a notice to pay per F.S. 83.56(3), 2) make a claim on the security deposit when they vacate per F.S. 83.49, and 3) seek collection of unpaid rent through lawsuit or collection company. 

Pros:- Guaranteed rent direct deposited to your checking account each month by the U.S. government (and they are never late)- HUD publishes the fair market rent increases every year so you can ask the section 8 office for an increase in rent and as long as it is within reason, it is normally granted. - It is hard to find landlords that accept vouchers (in my city the waitlist alone is 200+ families) so people are more likely going to want to avoid getting evicted once they find a home.

She is insistent on using her security deposit as last months rent.

Thanks for your response.If current owner has no security deposits in escrow am I allowed to require deposits or renters insurance upon closing the sale?

I'd also talk to the current owner, so if they want, they can let the tenants in that unit know.Hopefully you are getting their deposits transferred to you (it is the tenants' money and you will have to pay it back in full when they go because you don't know the condition of the unit when they moved in). 

I had to rush to find a new place, shell out thousands in deposits and ended up paying 15 days rent on the new place when I was still renting the old place.