Went to see a few properties, but met 1 really motivated seller who wanted to take the proceeds from the sale and buy a better house.

I will proceed cautiously.

Given that before buying you were not able to see all units then you should have put a HOLD BACK in escrow from the sellers proceeds of the sale.

I felt at the time that I needed to wait a little until the "dust settled" on my own primary residence before moving onto investments.Although I haven't been active, I did continue reading finance books/blogs and some real estate books and continued saving money so that when I felt ready, I would be able to proceed.

Does anybody have any advice on how to proceed?

There are no other legal proceedings which need to take place aside from preparing proper corporate documents to protect your LLC status.I advise you to consult your certified public accountant regarding the tax implications of forming an LLC.If you add further members to your LLC, you simply change your members by amendment with the Secretary of State.

Flips are taxed as normal income.If you buy a property, improve it and rent out for a reasonable period - you roll the proceeds of the sale into a 1031exchange. 

You can always change your goals and methods as you proceed if you want (and as the market changes around you) but setting a specific something to aim at will usually help you get clear about the next step.

It's not an issue with a normal sale as we would simply get a check for the excess proceeds from the title company after the closing but in this situation...

Legal proceedings are currently taking place to square everything up, but the process is moving extremely slow.