My strategy is stocks and bonds are invested in or through the 401(k), IRA, and ROTH IRA while I treat the real estate as a separate line of business as opposed to an "investment".  

Now, let's see if we can figure out your next steps.You could just sell them off for a little profit as others have suggested.Another option to consider might be finding private lenders who could help you bring these to closing (sale).Start by listening to family, friends, neighbors and others and listen when they complain about their 401(k), IRA, etc. and not getting the returns they would like or that their accounts are at risk on Wall Street.At the same time, learn about self-directed retirement accounts so you can teach those other people how put their money in a position where they can have greater control and get greater returns with less volatility.Then, learn how to introduce people you know to self-direction.

Because the business owner is only managing their own savings and not taking responsibility for the savings of others, the administration of the Solo 401(k) is greatly simplified.For those who truly qualify for the Solo 401(k), it is a great plan format for building tax-sheltered savings: high contribution limits, the potential for Roth savings in the plan, a participant loan feature, and exemption from tax on debt-financed real estate investments are all very nice features.For those who do not qualify for the Solo 401(k), IRA based plans provide great potential and flexibility as well. 

Originally posted by @Kira Golden:I have a lot of respect for Ramsey and his view points.

Originally posted by @Kira Golden:@Willis Chur  Has your friend considered Multi-family Syndication's?

@Calvin ChurchThanks @ Kira.

I am frantically trying to lower my tax bracket, beyond hitting the 401 (k)/ IRA limit real estate seems the best way to do so

@Toshiki Hoshino Yes guidelines from Fannie Mae:-If retirement income is paid in the form of a distribution from a 401(k), IRA, or Keogh retirement account, determine whether the income is expected to continue for at least three years after the date of the mortgage application.

I'm Kira and I'm brand new to Real Estate Investing.

I’d make sure his 401(k)/IRA investments are in diversified mutual funds/index funds and not individual stocks, but a mix of RE investment income and 401(k)/IRA investments is a recipe for a strong retirement (assuming he has a decent amount saved up)