Appears that only the owners of the property or those that are owed money are able to claim an of the excess funds after tax sale.  

Perhaps you could just quit-claim it over to your LLC after closing?

Keeping the rental and option to purchase separate will help protect you in the case of a default so you can evict instead of having a judge force you to go through a foreclosure because a tenant claims equitable interest.

Your LTV will be close to 100% (based on purchase price) if you do it any other way and you won't have any way to claim your sweat equity/improvements against the LTV.  

I'd be far more worried about discrimination claims by screening to some undocumented process.  

BTW, filing a L/O just may give notice to the lender that there is an installment sale, filing an option does not tie up a property as the gurus claim, I can buy the property from the owner subject to the option and allow you to continue under your intended transaction, if you don't buy, I own the property.   

Can I do a Quit Claim Deed or a Special Warranty Deed.

Additional method is to claim all as income including tips, so you can track your income through tax returns, however this can greatly have a impact on your tax situation.  

The problem with lost money orders is that the claim process to recover can take some time.

BTW, if your contract has language about recouping legal and collections costs, you may be able to recoup the cost of collections.Small Claims Court: Typically, this is a relatively easy DIY legal process.