Whenever I am asked that question, the inevitable shoe to drop involves some sort of credit issue, usually pretty egregious.I think prospective tenants with bad credit think that dealing with the owner will make it easier for them to get the place.

Overhead is high and unpredictable with HOA and the owner's hands are often tied.

Our income consists of cash flow from rental income from 40 SFH we own and manage ourselves (none of the homes have traditional mortgages tied to them).

Since commercial properties cap rates are in essence directly tied to interest rates, in the event of a 100 bps increase in interest rates over the next 18 months (which I believe is likely) I would fully expect cap rates to increase 100 bps as well and values to therefore decrease.

How or what is the simplest way to tie the knot on the deal.

If Daughter wants nothing to do with this property, you could stand arrange to stand in her shoes and probate yourself or contract to buy from her after helping her complete probate. 

On the one hand I feel I have a lot of equity tied up, but on the other-hand the cash flow is good.Another option I have is to scale-down my personal residence ( 0 mortgage) and use the cash I pull out to pay off the 2 mortgages on the rentals.

You need to have money set aside of emergencies and just life in general so I wouldn't look to tie it up and over extend yourself.

It is also tied to an airline mileage plan, so we reward ourselves often with free airline tickets!

Remember for resale value is tied to the primary term of the lease  and who is guaranteeing it.