My father in law lives in hot spring and we go visit him once or twice a year.

Would there be any other tax consequence to the partners as a result of the liquidation assuming no hot assets? 

First you need to learn to separate the following:Maintenance: usually things related to wear & tear or tenant damage.Repairs: usually broken items like doors & windows, caused by tenant or nature.Capital Improvements: usually expensive things that wear out: hot water tanks, furnaces, roofs, etc.The seller is correct that Repairs & Capital Improvement items should not be a factor for awhile (ALWAYS get your own inspection to confirm).

They were the hot topic and states stepped in and started regulating them. 

I wanted to buy a property live in it and then rent it out later on but in the DMV areas the housing market is extremely hot and people bid 20k over asking price on houses that only have 900sqft so I decided to get into Airbnb Rental Arbitrage not only because I'm unable to get a house but mainly because I've always wanted to get into Airbnb Rental Arbitrage but never really gave much thought to it.

STR regulations have been a VERY hot topic here for the last year (and even beforehand).

WA is not a landlord friendly state, but if you are going to invest in WA, the eastern side has some hot spots like the tri-cities area that may yield good cash flow and appreciation and still be close enough for you to go there when you need to. 

However I have had to replace some major appliances recently which had put my in the defecate and added to my motivation to sell (Hot water heater, two refrigerates and a washer/dryer).

Jersey City is hot right now but like I tell my clients the majority of the time I can find them deals that make more sense in Essex County but that depends on the client and what their needs are along with their comfort level. 

Unsurprisingly our economy is doing much better than theirs currently after that hot money injection.