There were also reserve requirements that must be met but the money doesn't have to be liquid, you can count investment accounts like your 401k etc.Good luck!

You probably have a very specific set of circumstances that have led you to the point of wanting to liquidate your investment. 

Does your contract call for the Earnest money to be FULL liquidated damages or can the seller also pursue additional recourse against you??

Gain some liquid funds, prepare for the future, and then consider holding for continual income.

The downside is more overhead (and I still don't know if this would involve SEC).I like simplicity and liquidity (because I need to move fast in my very competitive market).  

Is the cashflow more valuable in your financial position or the liquid assets?

Requiring commercial financing makes the properties a lot less liquid.

They wanted to keep my 10K EMD as liquidated damages if I tried closing with the loan.

I personally like to keep within 5-10% liquid at all times.

Here is his property managers words (Non MLS):"2014 Taxes: $6,817.08 2014 Insurance approx $2,000 Representing a family-owned portfolio of properties, seeking to liquidate as soon as possible.