Ultimately I want to use the equity collateralize for more purchases or cash out refi to have the liquid cash to use as down payment on future purchases.

I also consider the ARV important in rentals as a liquidation guide in case everything goes wrong. 

I know cash pays nothing but that loss of income is payment for liquidity (insurance) that could save your bacon @John Barnette IMO.

I can help you with the rattling noise.I would get some spray foam and fill the space with a can.

He is older and mentioned he prefers stock because of the liquidity, but we have a good relationship and I think he is more interested in helping me get a start, but will not ignore his desire to get a return.

Not sure if this is the same, or similar,  but Conklin Roofing devolped a product that sprays on.

My question is after I purchase my third rental property I will be out of liquid capital.

Do you think fee's associated with withdrawing funds from a self-directed IRA still make it a better place to hold the money than a Money Market (completely liquid) or Cash Value Life Insurance Policy?

I have about 70k in liquid assests to invest in my first property.  

For me, that's not good enough to justify additional risks associated with real estate investing (mainly liquidity).If you want to generate high returns, you will want to use leverage and purchase several properties or one larger multi-family.