All Forum Posts by: Tanner Sherman

A very common question that people have when they are getting ready to sell their home is- What should I do to prepare my house before selling? 

1. Find a Realtor 2. Get your home inspected.  3. Get a consult from a stager. 

As soon as you decide that you would like to sell your house, the first thing you should do is start interviewing agents. That's right, interview. Don't just work with your cousin Larry who got his real estate license last year and said he can slap it on the MLS for you, or think that you can save money by selling it yourself. Click here to find out why FSBO listings sell for way less than agent listed properties. When you realize that these agents are applying for a job, you will intentionally notice things about them that you wouldn't be thinking about otherwise; their appearance (are they groomed and well dressed or are there pizza stains on their t-shirt and shorts), are they knowledgeable in the field of real estate (if your agent cannot explain how the whole process works in their listing appointment, move on), how responsive are they (if it consistently takes 3+ phone calls to get ahold of them during normal business hours, do you expect them to answer the phone when the perfect buyer wants a showing during weird hours- probably not and you are going to miss out on a sale). These are just a couple sample questions that you should be thinking about while interviewing, that I will go more in depth in a later article.

Once you have found your agent, I believe getting a pre-sale home inspection done is necessary and worth the money. Even if you choose to not make any repairs, and presume the buyer will choose to do their own home inspection anyways, being able to attach this inspection to a listing helps paint the whole picture of your house to a buyer, and adds some integrity points with them since you are proving that you are not trying to hide anything. The issues are what they are and they can either take it or leave it. (I realize the seller property condition disclosure is supposed to serve this purpose, but they are so commonly filled out incorrectly or with minimal effort that buyers don't pay much attention to them in my opinion). It is very hard to read the label from inside the jar, so getting a third party to point out things that you have just gotten used is important/ (I am a trained home inspector and I still would choose to hire a home inspector)

The next thing you should do is spend a little bit of money getting a consultation with a staging company. They can give you an idea of what things you should pack, (family pictures, unique art, etc), and whether you can rearrange your furniture for the most welcoming presence or hire them to bring in staging furniture. (This can be difficult for some people to swallow but staged homes historically sell for more, so it's worth swallowing your pride- learn more by clicking here. 

Obviously these are the tip of the iceberg for what goes into a home sale, but let me know some other things that you think are necessary to do when beginning to list a house for sale!

My first thought is to refinance so long as you still cashflow after. (Assuming that this cashflow is after reserves) If not, I would set aside a reserve budget and then see what your actual cashflow is. Obviously you won't be able to get all of your equity out because you would have to do a different type of loan, but you should be able to pull out enough to purchase another property at least. The 2/5 rule is great and you should absolutely take advantage if it fits better with your investment goals. If you are looking to utilize that money and purchase a multifamily then now is the perfect time. I believe the 2/5 rule is significantly better than the 1031 exchange so if your goal is to upgrade then now is the best time. 

Alex, I love to see young people eager to get into investing! You are on the right track.

The best way to save up for the down payment is to work any and every job you can for a couple years, read lots of books, and maybe you meet a partner that wants to fund your deal for you on the way to saving up money. Become familiar with your desired market, analyzing deals and all the real estate jargon. I would not recommend utilizing a REIT exclusively to save up, but it still better than a savings account.

Find a side hustle, mow lawns, flip furniture, and be disciplined enough to not spend it but  do whatever you have to do to save up money while your friends are out wasting theirs and it will pay off.

Be willing to live a few years how most people won't, so that you can live the rest of your life how most people can't. — Mastin Kipp

I think it is important to have multiple accounts set up for each property. This doesn't always make sense because of the monthly fees involved, but you should be able to have one account per property no problem as long as you are keeping up to date with your reserves and accounting. I sometimes write personal checks from one account to the other, and although tedious, it's easy. 

Your open lines of credit will be higher, but your utilization will be low which will help your credit score. Not a bad idea to have that money available if you have the discipline to not use it. It will only affect your DTI if you carry a balance.

There are 3 things that you need to make a real estate deal happen; Money, Time(labor), and Knowledge. You do not need to have all three things on your own. The goal is to find a partner that can make up the difference. If you have the time to put in the legwork but no money and no knowledge or experience, then you just need to find someone that has money and experience but no time. If you have half the money, half the time and half the knowledge, you just need to find someone that can fill the other 50% in all 3 areas, or put together a team that can fill them. 

There are a lot of creators on tiktok that share great advice for STR

 Benjamin- thanks for the add! I'd love the opportunity to help you in your learning 

 I would definitely keep it strictly business. If you had to reprimand them it would be much more difficult to do so if you spent a day bonding over fishing. 

Is it in Honolulu or mainland? I have been researching repositioning hotels with low vacancy to multifamily/STR, but if it's on Oahu I'm sure it will be worth keeping as a hotel for when Ige lifts all these mandates and tourism kicks off again.