I currently have six rentals, one commercial, one new construction spec and seven parcels of developed land that I will continue to build on.

Obviously, individual preferences, goals and risk tolerances play a key role. 

This involves calling the PM for the HOA who called the tenants, and when it continued, call the out of state owner, who couldn't be located.

The IRS rules allow me to manage it, but I have always used a property manager and will continue to do so.

(I've tried two property managers, but have fired both because of poor performance...I have one for my out of town property & he is amazing)Option 2) Use commercial bank financing through my local bank to continue making acquisitions of SFRs to grow the portfolio.  

The best way to scale up is to sell any SFHs and purchase multi units(5+ units value driven by cap rates).You could continue buying SFHs but that will only increase your work load and risk. 

Mine are closer to the 50% rule, so I'm playing it conservative.  

What can the bank do and what legal ramifications could be in play here .

Or continue paying my coworker and collecting cash flow.

A number of Adverse Possessors mistakenly state that the “hostile” requirement of the law of Adverse Possession (open, notorious, actual, continuous, hostile possession) necessarily requires breaking the law against trespassing.