Now he needs to participate in the payout to investors who lost money when the properties they bought through GEG were never renovated, even after they paid for those renovations.I will be contacting the SEC and FTC so they can take care of it.

My posting and commenting has decreased significantly in the last several months but after the LA fires, I'm participating more. 

Overseeing tradesmen while they work on your properties sounds like material participation to me.

Our volunteer fire department invites surrounding departments to participate.

You'll want to be clear on the IRS rule for material participation if you do decided to switch to property manager. 

While Im not currently seeking distributions (we are in series B shares - those that participate in the upside and "may" accrue), they have made distributions and we are simply building another cash reserve.

Substantially all participation.3.

We took them to arbitration, but they did not participate and we found out they closed their offices and I believe the owners are no longer residing in Florida.

So again, to be a passive participant is hard for all the reasons you note and more.  

I suspect without money and active participation as LP, you cannot legally do what you suggest.Have you seen the underwriting?