Can I propose a master lease option with the current owner if I can secure $15k down through private lending?

They currently live off Social Security and $3,000 in rental income, so I don't think they need/hunt for stock losses to claim.  

"I'm not sure whats left in this tape....see if you can find any value"....you know to expect a mixed bag of secured and unsecured, deeply underwater BK13, demolished, significant back taxes, tax sales etc etc.

I plan to give a refund of security deposit (less any damages) however I am unsure if I need to refund any portion of the actual rent or not?

Effect of seller's default on loan secured by mortgage or lien on property If, at any time prior to the expiration of the time period in which the option purchaser has a right to exercise the option...

Most title companies can give an "investor/bulk" discount if you ask for it.Elanor Ortega at Title Security is very good (you can pm me for phone number). 

Do you leave security bars on widows and doors on your flips.

Also, I opened a business bank account to hold security deposits & to separate personal & business funds. 

With that comes confidence in what you are investing in giving you a sense of security.

Holding costs is currently at $1,800 (city registration, insurance, security).