My plan would be use the 401k kind of like a hard money loan where I'd acquire the property, rehab it, then refinance long term, pay off the 401k loan and get it rented.

I would list the property and advise the tenants you are planning to sell. if they want to stay month to month, that's fine.

Unless you negotiate a new contract or addendum with your PMC, they do NOT have to abide by any requests/demands you make that contradict what's written in the management contract.If they have in fact NOT followed the terms of their contract, then you'll want to send them something in writing pointing out the specific language in their contract that they violated and ask what they plan to do about it.If they fail to correct or address the issues, then you'll want to start looking for a new PMC.

do you plan to live in that property?

@Van Lam - I think your plan to finish rehab and then rent them out a higher market rents makes sense to do first.

I am planning to get into the TN real estate market as my first investment and am looking for some information.In particular: Areas to steer clear of, property management fees, typical cosmetic rehab costs, etc.My strategy is to put large down payments on 2 properties (relative to housing prices) to help pay for my living in NY while still gaining appreciation in a growing real estate market.

Finally, check with the Town to make sure there are no municipal liens, Make sure they're on Town sewer, check with the tax assessor to see how many bedrooms the tax office thinks there are, (important if you are flipping) buy ok to have more bedrooms if you are planning to buy and hold.  

My plan would be to use the equity loan from the second home to purchase another great deal (3rd home) and use the rental income from the second home to pay towards the equity loan and then start renting out the third home to get rental income and start paying off the mortgage on the 3rd home.

Let me know if you plan to make it so I can let the owner know and he can make sure they are properly prepared.

We've also been riding the wave of low interest rates for years and now that rates have risen investors have to be a little more creative with their investment plans and take a longer term view of stabilizing the building to make it a nice cash flowing property.Where are we going to find more 2-4 unit properties?