I figure this could result in my putting down about half of what I'd expect doing 100% commercial with 25% down and would leave me with liquid reserves for both properties.

DEFAULTS: If buyer defaults under this contract, any and all monies deposited by buyer(s) shall be retained by seller as full liquidated damages.

The owner is liquidating all of his rental properties that he's own for 40 years.

I am fairly liquid but not liquid enough to buy the property cash.I know there are ways around this and I was hoping the biggerpockets community would be able to steer me in the right direction.  

. ($39K)This gave us the liquidity to invest in other things!

Perhaps offer to wok for free in exchange since you have no liquid capital to give them for coaching or expertise you can exchange.  

with the purpose of investing in real estate, what do you do ???We are targeting some type of aquisition in the next 2-4 months for our second unit. 

Here are the few that I know of:  Lumber Liquidators in Albany.Habitat for Humanity ReStore in Oakland.Sincere Home Décor in Oakland.

I contacted PIP a dozen times asking what to do with these liens and if there was a way to liquidate them, even at a substantial loss on my part.  

If you have other assets, you may be able to liquidate some of them to meet your obligations.