But ...The first thing I observed was the replacement cost portion of the quote, was, IMO, less than what it will actually cost to demolish the remains of the existing structure, pay for any hazardous waste removal following a catastrophic loss, and actually pay to replace the property in the event of a total loss, even though I used the quote feature to increase the replacement cost value by 20% (the maximum it would allow).

Unlike some buyers, I ALWAYS go look at the properties before the sale and discovered that the vacant lot had an active railroad track on it and therefore was unbuildable, and would remain unbuildable until the railroad removed their track. 

Competition remains strong but it doesn't mean your goal is impossible to reach.

It’s generally better to pay taxes, especially if it’s preferential LTCG treatment and make a sound investment with cash that remains than defer and make poor investment decisions. 

And it also concentrates the equity in your remaining property. 

My inclination is to suggest paying back the PML 70% of the land proceeds (presumably $168K) at that closing and then hold the remaining loan until I sell the house. 

Some facts/info you may already know but if not:1) You assume the loan from the servicing bank, meaning you will work directly with the servicing bank.You assume the loan amount, but still need to come up with the difference of the VA loan amount and the sales price, in your case 172K. 2) No one will finance the entire remaining 172K amount.

While none of us will be getting our money back he can live well selling off the remaining assets as long as they don't shut him down.

It will almost ALWAYS be below asking price, so you will have to make 10s, if not 100s, of offers to find a motivated seller.Then the property will have to pass inspection, appraisal, etc.

I am excited, motivated and ready to learn and grind in the Real Estate Market!