While the cash allocation is somewhat high, it serves as a reserve for our rental properties and future real estate investments, held in a high-yield savings account.

ONce you put a rental on your return and it has an accounting method in place, you can't go back and change it. 

Open a separate checking account dedicated to marketing and budget 6 months of mail, so if you have $6k, you would do $1k per month with 1/4 of that dropping every week.

Or if that’s not allowed sell it to a friend who will then sell it to my personal IRA at a discounted rate so when I turn 65 and sell the properties , I don’t have to pay any tax on all of my properties assuming I don’t sell them until they are in my IRA account…

You have options just need to find them, open accounts, and start investing. 

If you haven't activated your RentRedi account yet, activate here - it's totally free for Pros!

We have been putting most of our extra money into retirement accounts before this.

Any reason to not account for a larger CapEx? 

I would make sure to connect with an investor friendly accountant to understand the tax benefits you may be able to pursue. 

My cash is in a high yeild savings account only making about 4.5%.