You can take distribution from your IRA at any time subject to taxes (and penalties for premature distribution).

My question is 1) is it premature to sell these properties after less than one year of poor performance, and 2) if selling is a good idea, should we sell off-market via our property manager or put it on the market.

So there is no personal tax benefits and cash flow belongs to the 401k (not you).Ultimately this is your money and you always can take a distribution from your 401k, subject to applicable taxes and penalties for premature distribution. 

More likely, it never actually closed and it was marked as such either prematurely or in error. 

Little things like this can mean a premature turnover. 

@Will Little you can chew gum and walk at the same time. 

You and I have spoken in the past, so I want to be clear this is advice from me personally and not the company.I think it may be premature to come to any conclusions on this deal or outcomes or make decisions on how you want to handle future residents.  

He started gumming up the works with when it came to leases and drilling for oil on government lands and just basically made it restricted to supply and the ability of the gas and the oil companies to extract the stuff out of the ground that...

In first case the tenant moved out and there were gums on the carpet and drawings on the walls.

You want people that can follow rules and chew gum at the same time.