You laid out the pro/con of each approach in your post, so I would take it one step further and do this exercise with your dad:Sit down for 30 minutes and ask, where do we want to be in 3yrs, 5yrs? 

Talk to a CPA.Yes there are depreciation implications, as you would basically be stepping into the shoes of the previous owner of the LLC.

As a result, seven people received interest in the property (1/7 each).

He can help with the first step, which is to determine the true market value.  

I backed into it and did not do the steps required to avoid big dollar losses.. if I knew then what I know now..I could be so far ahead of the game.

You get what is called a "stepped up basis" if you inherit the house.

It's thinking about 5 steps further down the line than I need to be at this moment and holding myself back because of that.

Whether it's faucets or toilets, I'll always get a step or two up in a brand name. 

Can anyone with experience please share the steps necessary to begin this process or can anyone share some resources to educate myself and my investors?

Big step, but exciting!