Now if you're looking purely for returns without capital gains I would understand, but personally, I would never consider rental properties based solely on rental returns without regarding capital gains and more importantly liquidity. 

If they're just rusty, sand and spray paint them.

Property 3 has equity and if it is break even cash flow or better on its own, you have options.You should consider doing all the math, seeing what cash you would have left after liquidating and how much you have and could have by keeping, pulling equity out and reinvesting those amounts.

We have a relationship with a loan servicer who wants to liquidate in bulk and we have the opportunity to buy in bulk.

Landlords in Florida have the option of rerenting, standing by and doing nothing (in which case, the tenant remains liable for the rent as it becomes due), or invoking the right to liquidated damages, or early termination provision.

Yes, I always keep a minimum of $10,000 cash liquid as "just in case" money, so I would have enough for the down payment on a MFR. 

After talking to him for a while he showed me a list of about 30 performing notes the investor was trying to liquidate.

Have you seen their bank account and financial statements showing liquid funds??

If you do not have one you need to work on filling one out to show liquidity and net worth.

Although this is a long-term commitment, they do have liquidation options should it be necessary.