When we moved, we turned it into a rental, hoping this would be the start of our real estate journey—something we’d like to continue once my husband retires.Some key details:My husband is active duty and will retire in 3 years.We have one final move coming up this summer to Raleigh, NC.Our current debts are crippling us—the high interest makes it tough to stay afloat every month.The plan me and my husband are thinking bout:Sell the rental property.Use the proceeds to pay off all our debts, set aside emergency funds and a down payment for our next home.Free up $1,500/month from debt payments, and that also can stash in a high-yield savings account.Regain full VA loan entitlement, allowing us to purchase a multifamily home and use the house hacking strategy for up coming move.Avoid capital gains tax, since April marks five years of ownership, and the tenant’s lease ends in May.This wasn’t our original plan, and we hate the idea of using our equity to pay off debt.

If for some reason this falls through should I attempt to offer more money for a quit claim deed or proceed with the newspaper notification process. 

This is really a lot of information packed into a densely worded post.Yes, you can use loan proceeds to buy out another member, but it doesn't seem like you'll have enough to buy out and develop.

Proceed to Step #4.4.

Frankly, if you are proceeding with a transaction and you are NOT comfortable, do not proceed. 

Let me know how you'd like to proceed!

If the seller files for bankruptcy, that will involve you in a legal proceeding.

And there you are in luck because you can purchase any type of investment property anywhere in the country and defer all tax as long as you purchase at least as much as your net sale. and use all of your proceeds from the sale in the purchase. 

If you ultimately decide to proceed with an LLC or any entity for that matter (particularly an entity that is a deed holder), the name you select can have unintended consequences: The entity name matters for bank paperwork, claims that are brought, lien filings, deed recordings etc.

And with those proceeds, what price range would you be targeting for the residential or self-storage rental properties?