Can we use our current investment propeties or purchase another investment property purchase to at least slightly offset the tax hit?  

There are also additional costs of operating and maintaining an LLC, like separate bank accounts, annual report filings, tax filings, etc.2.

In small college town with high rental demandAsk price 745kGross rent: 9750/mth 177k/yr     (differed maint properties with potential 200/mth per unit increase once renovated) estimated reno (190k across portfolio)NOI: 91,475/yr   (12.6 CAP)    (includes tax, ins, listed maint for past yr)     After reno NOI 127,475/yr   (14.6 CAP) Deal info:    - Owner finance 745k 20yr at 6% 20k down minus deposits (~13k)Cashflow  = 2100mth     (self-managed) (self maint similar to the previous owner)By this alone, 2100 cash flow added per month, it will put me at my financial freedom number of monthly cashflow is equal or greater than my families spending amount.

Hard money loan.

If landlord is willing to go out of their way to help tenant by  accommodating bi monthly payments, landlord should be compensated for it. this comes in the form of money.

Also, it may save you a lot of money/headache if you buy a plane ticket and rent a car to see it for yourself.

Ethically, they should give you the new owner should give you the money; but they don't have to. 

Take your money out with a refinance and get another property?

My plan is to move out in two years after I qualify for the possible capital gain tax exclusion so then I can either decide to keep it for 3 additional years (or maybe longer, and forgo the exclusion)and move the home into a LLC.

Tell your tenant the payment bounced and give them 72 hours to provide you with a cashiers check or money order so it doesn't bounce again.