However if neither of them were into rentals, I would rather liquidate the properties and leave them cash/stocks. 

But when liquidity leaves the market or banks fall apart such as the Texas S&L crisis of the 80;s then we have real problems. 

If you leverage up, are you prepared to have the resources to carry the mortgage and not able to liquidate when the market softens? 

This results in a taxable liquidation and event and also would likely take too long- Sell the parcel at arm's length to a third-party buyer.

Liquidity needed?

You can compound this by investing the money in conservative investments that will remain liquid like C share mutual funds.

I like (for almost 20 yr) good, quality SFHs in various US metro's suburbs.This in my opinion is a long game and requires patience BUT a relatively simple one to evaluate, handle, manage, liquidates, finance, etc. 

While that's true don't forget single family homes have the largest buyer base when it comes time to liquidate them.

But if she's financing with a commercial loan, she can actually get a 5-year fixed rate right now in the mid-3% range with a 25-year amortization with appropriate income to service the debt, and if personal credit, liquidity, and net worth are strong. 

You can refinance and take some money out to buy another property.Generally, if you have too much equity in a property, you're right to think about liquidation of it.