Both vehicles have pros and cons and the optimal portfolio has a combination of both.

The properties are owned by our LLC.Assuming nothing changes from the current tax perspective, what is the "smartest" tax-efficient method of getting this equity out of our investments:1) Cash out refi $1.6m (80% LTV of all the assets) and invest that money in a more liquid (albeit lower return) investment vehicle?

It is an asset protection vehicle if managed properly. 

I section 179 all my company's vehicles.

My wife and I are real estate newbies, but have been investing in more "traditional" investment vehicles for several years now.

I need a vehicle to find and drive sellers to me .  

I can then find another good deal- used vehicle for below market value, with lower miles, and a bit newer. 

I would suggest looking at the ROI, rather then cash flow, that you are getting for the cash you are putting down, and compare to other investment vehicles.

I have my personal residence and vehicles on the same insurance, and my personal residence (worth much more) is less for insurance.  400-600 is the range i was shooting for. 

@William DavisI can't answer your question, nor can anyone else without knowing the process of accomplishing "a way to minimize your tenant's rent without losing money".I like the sound of "making our air cleaner without switching from gas vehicles" but not if the strategy is killing half the population of people who drive gas vehicles.People are "so quick to judge or make fun of the idea when you don't even know what is" because we don't know what it is and making blanket statements/ asking generic questions and saying "I cant say" when people ask what you're talking about - sounds sketchy.