I've done my investigating and found out that the owner owns a TON of houses in our city and has over 160 civil law suits filed against him for stealing people's deposits, not fixing properties that are falling apart, etc.

Or I would think that for a few months you could continue month to month with the check in your names and deposit them in the LLC account as if you were just the Rental Managers.

I would also look into witholding their security deposit for the pet odor by obtaining some sort of proof.

As I have some background in collections, when she can across an inheritance, she asked me how she can deposit the money without creditors finding out because as soon as you opens a bank account, creditors seems to find out, and the money will be seized. 

I'm curious.However, I have no clue, beyond maybe more secure deposits, of what it would do for real estate investing.Blockchain AFAIK is used for transactional security.  

If they didn't reimburse me I would deduct it from the deposit. 

Think of all the things that could go wrong and see if the lease addresses them: unauthorized pets or tenants, early termination, security deposit, lease violations, late rent, eviction, lawn maintenance, parking, etc.5.

I would also suggest that your property manager collect one single check for their rent each month and that their security deposits are not split up. 

Won't they ask questions if they see an unusually large deposit from someone?

I'd also advise everyone pays a non refundable deposit because no one ever admits to being the one who caused the damages.