FYI, in case you're wondering, here's a quick explanation as to my thinking when I say that the optimal choice from a mathematical standpoint is to NOT pay down the mortgage: To analyze this, you have to ask yourself a couple questions: First: What is your short-term and long-term downside to buying rental properties right now in Grand Rapids?

The mess around for a few weeks and then as time winds down they end up buying a less than optimal property.

But the kicker that cemented my decision was there wasn’t any optimism from the commercial lenders and that killed my spirit.

I’m just starting out in commercial real estate, so the banks (community banks) are giving me standard rates. (5% interest, 20 year amortization, 5 year balloon payment, with 20-50% down). With these rates I’m having ...

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To get around optimism I usually ask a logical question:"Why not take out a $100K loan, rehab the units yourself, get to 100% occupancy and make back you're $100K?" 

thanks Natalie and Ben for sharing your inputNatalie - to answer your questions, we bought in 2002/3 and rented 2014 , i understand that i would have to pay tax on depreciation , i had heard of 1031 but not the details - i'm not planning on getting anymore rentals so was looking for optimal strategy in this instance

@Frank Hennings I think @Russ Draper nailed it with looking to optimizing for the drop-down price fields on places like Zillow, Trulia, Realtor.com, etc.  

INTROCraig (aka CDP) has managed renos and the contract process for both himself AND othersHis smart approach = limiting downside and learning from the pastCDP writes down all mistakes to learn from for next timeGENERAL CONTRACTOR BIDDING PROCESSGet multiple bids & compare, and ask for line-by-line proposalsCan have two out of three, but not all → (1) Quality (2) Speed (3) Low CostIncent project completion via an end balloon payment (typically in 10% range)Don’t do cost-plus, instead provide max price for material/parts…keeps costs downGC should get multiple bids for all sub-vendor work, ensuring optimal pricingEnsure GC keeps good records for future auditsHire structural engineer for changes to things like load-bearing walls, etcCONTRACTINGGCs mostly require their standard template.

With a mortgage broker the package can be presented in an optimal way to the bank which can make them say yes to the loan.