However, if you kept good records and depreciation was taken appropriately, and you actually resided in each half of the property for 2 out of the 5 years prior to sale you should be able to take it all in the one sale with the exclusion.You would always have the option of 1031ing half and since your already contemplating a purchase it would be the conservative approach

I currently don't have an LLC but am contemplating on setting one up eventually (don't like the high CA fees!)

I am, however, contemplating a smaller multifamily to live in while we tackle our debt.

There can be many reasons why you might not want to do what you are contemplating.

At the moment I’m contemplating selling the NC house and use the equity to purchase a cheaper home that can generate some cash flow.

Who do you know whos doing what you're contemplating. 

That's not to be evasive, but as @George Fitz said above, Self Storage runs the gamut of options with the common denominator being you (the owner) rented space for people to store their treasures (and even this can be household items, boats, RV's, commercial, etc.)The three questions that we typically ask others (and ourselves to) when they're contemplating buying a Facility is the following:1) Why are you excited about this deal? 

Any considerations or strategies I should contemplate?

We are contemplating turning our primary residence into a rental.

@John Jacobus For the type of 2-3 unit residential project you're contemplating, buying something with an idea to change zoning would mostl likely be a waste of time and resources.