He was giving his sister money every month and she was supposed to pay taxes etc.

Here are some rough numbers for my expenses so far:Purchase price: $1+$25 recording feeBack taxes: $2300Legal fees: $3000Rehab estimate: $5000Tax assessed value is $66k.  

However if i sell now is there any restriction on closing the replacement properties before end of the 2016 tax year?

I was hoping I'd find support for whether or not it would be a good idea to get hard money for a 25% down payment, traditional financing for the remaining 75%, with all profits (rent less both loan payments-HML and traditional financing, prop tax, insurance, and 10% maintenance fund) going to the hard money lender under the loan is paid off. 

@John McAuleyDmitriy is correct, there is no means for your retirement plan to be a lender on a property that you own personally.With a self-directed IRA or 401k, it is not you investing in real estate with access to that tax-sheltered retirement savings, but rather the plan investing in real estate.  

I have a solid rental portfolio of houses here in Austin, but the cashflow is minimal compared to what I can get in multi-family or in the mid west. additionally, I'm looking at purchasing non-performing notes and turning any of the foreclosed properties into rentals.Are there any strategies for selling off the houses, either in bulk or individually, to minimize the tax burden for when I reuse that capital to purchase non-performing notes?

If you're ready fine, but there will be deals next year too if you're too over taxed with commitments.  

The expense includes taxes ($12K), sewage, water, and other various maintenance items.

Properties are generally much cheaper relative to the rent they pull in, than in NY.3) Lower fixed costs - lower real estate taxes for starters relative to your rent roll, etc.4) Lower variable costs - labor is A LOT cheaper here.  5) Less stringent code enforcement.6) Less maintenance - milder weather, and younger average age of homes make for less maintenance.   7) Diversification - low entry price to buy property allows and investor to manage risk by buying properties in different neighborhoods instead of putting more eggs in one basket.In additional to the benefits I listed above the city is growing so fast that homes rent very quickly, often times before the sale of the home.  

Taxes=1493, hoa=213.