Ken McElroy: Step by Step Guide if Your Property is in Trouble

What to do if your property is in trouble? If your interest rates are doubling? What will save your deals? This is a step by step guide on what to do if your property is in trouble, from managing your bank all the way to getting multiple bids from all of your vendors. Ken McElroy, CEO and founder of MC Companies, shares this golden guide with us.Read this entire episode here: https://tinyurl.com/mry4cbnvWhat are some of the things we should be doing if our properties are in trouble?The first I always look at is what's within your control. One of the things I've started to do is really dial in on my operations. Now, I have a massive advantage because I started in property management right out of college. For the first 10 years of my life, I managed 20-30,000 units. When I step on a project, I have a checklist in my mind that I've been through 100 times. The first thing I've done is scrubbing each one of my assets. I want to make sure that my expenses are completely in order, everything's been bid out multiple times, and that my market rents are exactly where they should be. I make sure that I have the right teams in place, that I'm maximizing my revenue, my other income, and my expenses. That requires a fairs amount of work. That's super important because no matter what, that is going to determine your next loan, your next investor, they're going to look at the operations.The second thing is you have to dig into your partnership agreement with your LP equity and your prefs, and all of that, and you need to take a look at your stress points. And then you can start to bring in other sources to top it up, whether that's asset management, it could be family office, institutional, or a number of things, you can give up GP equity, you can bring more LP equity, you can come up with a loan, all of that should be fully transparent to your existing deal. You can't just change things and tell them later. You have to paper up and make sure it's all correct. That's the area that people are going to be in trouble on, thinking that this will be short term, I only need this for six months, three months, one year, whatever. If they're right, they're probably going to be okay but if they're not, people are going to wonder how they got squeezed out.You need to go out and get other opinions from brokers, opinions of values, people are doing that all over the place. Brokers aren't listing deals right now, they're actually giving everybody BOV's. That's really important because that substantiates what the thing is worth. Then, you have to look at your debt, and see how much equity you have, and if you have equity, even if it's half, or 2/3 or 1/3, of what it was, that's still okay, you're in the money. Now, it doesn't really matter today because you're not selling, If you're selling today, that's exactly what would happen. You're playing the long game here so you need to have all that information and then you can go out and make good decisions on the asset, preserving the equity. I've been in a situation where we bought things and equities went down, probably everyone has, a car, a house, things depreciate, things go down in value, but over the long haul, especially with this inflation, you're on the right side of it, even though you might be feeling a little bit of pain. I want to be in hard assets during high inflationary times, because we all know, you can't build a home or apartments affordably right now, so if you own them, you're actually in that category. That's good, even though it might not feel good, if you can hold on to it, I truly believe that real estate is going to really skyrocket based on all these crazy...