Welcome to The Get Real Podcast, your high-octane boost and in the trenches tell-it-like-it-is reality therapy for personal, business and real estate investing success with your hosts, power-preneurs Angela and Ron. It’s time to get real!

Angela: Hey everybody, welcome to The Get Real Podcast. I’m Angela Thomas and I’m here with Ron Phillips. Hey Ron.

Ron: Hello. Hello.

Angela: Hey. So today I know we recently talked about how to know when you have equity in your property. So we’ve already gone over that. If you haven’t seen it, go back and I don’t know what number it was, but there’s one about equity where we talked all about how to know if it’s a time to sell based off the equity that you have in your property.

Ron: And if you can’t find it, just go back to number one. Listen to all of them and they’re all great. So just do that. That’s my recommendation.

Angela: You might as well anyway. But you know, once you figured that out and you know that it is the right time to sell, because you’re going to make money off of it, you have some questions to ask. Like, how do, what do I do now? What do I do when it’s time to sell it? How do I prepare to sell it? How do I get, you know, the best price? There’s quite a fewdifferent things to consider. So, first off, the biggest question if you have an investment property is yeah, it’s what you do, right? Do you sell it as an investment property or retail?

Ron: Great question, Angela.

Angela: Yeah. And we get this question all the time because we help our buyers like we help them find the property, we’ll help them buy the property and then we help them through the next steps of their investment journey. So we help…

Ron: I feel like we should do a phone, a friend episode where we just pick up the phone and call somebody and ask them some of these questions and just see what they say. It might be fun.

Angela: All right. I’m down. Yeah.

Ron: Put them on speaker phone and it’ll be like…

Angela: It’ll be like a radio show. Yeah. What do you think about this?

Ron: We’ll just get on our phones and we’ll pick somebody randomly. Some friends and we’ll say, hey, we’re live right now.

Angela: No pressure.

Ron: And we have a question for you. And this one can be like, do you sell your investment property as an investment property or do you sell it retail? And then just see what they say.

Angela: And hopefully we pick, you know, a friend that doesn’t know anything about investing and there’ll be really funny.

Ron: I have tons of them. So I mean. If we used mine it would be like Russian roulette. It would be fantastic.

Angela: Yes. Sounds good.

Ron: I think we should do it.

Angela: All right. So, yeah, we’ll do that sometime. We’ll think about it, Ron. Great idea.

Ron: We’ll have to work on the technology because right now putting them on speaker phone would be really hard.

Angela: Okay. So, let’s talk about, you know, our opinion on this and then we can call a friend later. So, all right, so deciding to sell as an investment. So we get most people that buy investments with us, they want to just sell it as an investment because it seems easier and it, I mean it probably is easier because…

Ron: It definitely it definitely is easier.

Angela: Right. Because you don’t have to, you don’t have to worry about when your tenants leases up, right. You can just leave your tenant.

Ron: Way more liquid, right. So, I mean, if you mean, one of the big cons for investing in real estate is that it’s not liquid. You can’t just go, hey, I’m going to go push a button and my house is going to be gone and all the equity is going to be in my account. It’s going to be fantastic like a stock. That’s just not the way it works.

Angela: Exactly. Yeah.

Ron: This makes it a little bit more liquid because again, you don’t have to worry about your tenant. You don’t…

Angela: They continue to pay you rent, which is, you know, that’s always, that’s always good. So instead of incurring holding costs, you know, you’re collecting rent while you’re listing your property, which is, yeah, that’s definitely a big plus for most people, right? We like money. So your holding costs obviously are lower or non-existent at all, or you’re making money. You don’t have to fix up the property.

Angela: This is a huge one. Maybe, you know, you go in while you’re tenants there and put in some new carpet or you know, fix major things that an investor would care about, or if there’s a roof problem or you know, something, something big you’d have to fix, right. But you don’t have to go in and make it show ready, because you’re not going to be having normal, typical homeowners coming through, right. Who’s going to buy your house?

Ron: Investors really don’t care about all that stuff. They care about the number and they care about, you know, most importantly, they care about the big items that are going to cost them money, right.

Angela: Right. And that’s it.

Ron: Yeah. So, I mean, you just don’t, you don’t have the dude down the street and his wife and his kids traipsing through your house and picking apart everything they don’t like about it.

Angela: Yes. And since I just sold a house, I have a lot to say on the subject, but I’ll try not to…

Ron: It’s a touchy subject for Angela. So…

Angela: Oh my gosh. Okay. Yeah.

Ron: It’s a fresh wound.

Angela: I am so sorry that I don’t have white cabinets in my house I sold. Man I had this gorgeous nodded oak that I love. Um, but apparently people get really upset if you don’t have those damn painted white cabinets, okay. I just couldn’t believe some of the things these homeowners get upset about, you know, like a, they don’t like the color of something that was obvious. They don’t like, you know, what’s the way your house is facing? We actually had people that said they wanted to put an offer in, but they didn’t realize our house was facing, whatever south, I don’t know I think it’s south. Apparently that’s an issue.

Angela: So, I mean, you know, these are things that a homeowner cares about that a investor will not, they don’t care which way your house is facing or your cabinet color. I mean, as long as they can rent it, it’s all good. So I got so upset with all those showings. My realtor be like, yeah, they love it except fill in the blank.

Ron: They want you to rip out all of your cabinets and put in white ones.

Angela: Yeah. Or paint that gorgeous wood white. Now that upsets me. I know most people are cool with it, but. All right, you don’t have to deal with that…

Ron: That’s a big, huge, hey, this is way easier over here, okay. But while you’re making this decision, there’s more to there, I mean there’s more that you need to think about, right. Because you’ll probably are going to give up some money if you sell it to an investor.

Angela: I have never seen a scenario where they made the same amount of money selling it to an investor. I mean, every time somebody comes to us and we compare it, I haven’t though, I didn’t say never. I didn’t say it’s never happened. I’ve never seen it where somebody can make the same amount of money selling it as an investment. So have you seen it Ron? You’ve seen it?

Ron: I don’t know that I have.

Angela: Okay. I wasn’t trying. I mean I do like…

Ron: I don’t pay that much attention, but I don’t know that I have either.

Angela: Well I actually see quite a few of these because people come to us and we have our realtor on the ground, our connection, you know, look up comps forum and we compare what they would get selling it to our buyers compared to selling it retail.

Ron: And nearly always the numbers are higher.

Angela: Yes. So that is the giant con. So you have all these pros selling as an investment that sound pretty sexy, to use Ron’s word. But the con getting less money is one that really matters. Don’t you think as an investor? I mean that’s a big one.

Ron: If it’s significantly less than, it’s a big deal, right.

Angela: It’s a big deal.

Ron: Usually in a market like we have currently, it is most likely going to be substantially less.

Angela: Yeah. And once again, this is just a numbers question. You’re running a business here, your investments are a business. So obviously you have to compare the spread that you would get selling at retail. Does it make up for these other pros that you’re missing out on? The pain in the butt and the fact that if you’re selling it retail, like we said, you have to make it show ready and it has to be what people want in this market.

Angela: So I should have painted my cabinets white. I should have, if I wanted to sell it fast and get top dollar, I should’ve just bit the bullet and painted those damn cabinets. So that’s the big…

Ron: I don’t know if you guys noticed the cabinets are a touchy subject for Angela.

Angela: There a really touchy subject. I don’t agree…

Ron: She complains three times a week about these people who come in after the, you would think after the 25th person that came in and said, I just wish it had white cabinets that Angela just said, fine.

Angela: Okay I’ll paint them.

Ron: I’ll give you some money to paint the cabinets white.

Angela: Oh, I did say that, but it just ruined it that they weren’t white, so yeah, but I was an idiot. I admit it. It’s okay. I’m a little, I’m pretty stubborn. Don’t be stubborn like me. If you’re going if you decided to go retail because the prices, Ron’s laughing, sorry.

Ron: Angela may be stubborn. Those of you who don’t know Angela, she may be a little bit stubborn.

Angela: Like just a tiny bit. All right. Like a little.

Ron: It’s the German in her. No offense to any of you German people who aren’t stubborn. I don’t know anybody.

Angela: I don’t know any Germans that aren’t stubborn. I want to hear from you. Yeah. If you don’t have a temper and you’re not stubborn, I mean, are you really German?

Ron: We should have you on the podcast because you’re an anomaly. There’s probably something else really special about you too.

Angela: We’d love to hear from you. But anyway, so you do have to compare the extra money you’re going to get in a retail sale and compare the numbers to the money you’re going to have to put in to make it show ready. And you know, you’re going to have to deal with all these extra, you know, all this extra crap. All these homeowners going through your house and being picky on your stuff.

Ron: Let’s put this into perspective just for a second though.

Angela: Great go for it.

Ron: In reality are you the one that’s going to be dealing with all the crap? No. Really you’re not because you’re not Angela, you’re not living in the house and it’s a long ways away from you and there’s someone else who’s going to be dealing with all of this stuff. Now they are going to call you and say, the person didn’t like your house because the cabinets weren’t white, but you did not have to, you do not have deal to with any of this stuff.

Angela: You also don’t have any emotional attachment to it. So you don’t care if they paint your cabinets white because you don’t live there.

Ron: That’s correct. That’s correct. So put in proper perspective and eliminating Angela’s crazy story entirely because it’s not relative at all. Not sure why we wasted five minutes on your story, Angela, because…

Angela: Hey, ouch. We could edit it out, but I thought it was kind of fun. So.

Ron: No, it was fun so we’ll leave it in. But anyway, you don’t have to deal with all that stuff. So this is, it comes back to a math problem. This is a math problem again, right? So there is a pain in the butt factor. It’s going to be smaller than Angela’s, but it’s going to be there because you still going to have to deal with…

Angela: Smaller than Angela’s butt, yes keep going.

Ron: Okay. So, I completely lost my train of thought. Now what have you done to me?

Angela: Sorry. Oh my gosh. Okay.

Ron: Let’s just move on. It’s a math problem.

Angela: It’s a math problem. Do the math, do the due diligence and most of the time for the people that come to us with this issue, it makes way more sense to sell it retail. It just does. And you just have to bite the bullet. Because you’re an investor and you want to make a return and you want to have enough profit from selling your home that you can invest in something that hopefully makes you more money, right? Isn’t that the goal?

Ron: Yep. Absolutely.

Angela: There you have it. All right.

Ron: Is there anything else we need to know Angela?

Angela: Not about me, not about my house. We’re done with that. So yeah, let’s just move on down the road here. And now that we, let’s just say we’ve decided to sell our investment property retail.

Ron: Because most likely that’s the best scenario.

Angela: We are investors, sharks and we’re going to make the most money we can here.

Ron: Top dollar baby, top dollar.

Angela: So first off, quick side note, you do have to make sure that you start selling it obviously after your tenants leases up. Right Ron? I mean, is there any way around that?

Ron: This is the part where I told you that it’s probably more liquid if you sell it as an investment property? Less liquid if you don’t right. Because if you, if you decide you want to sell it halfway through a 12 month lease, you probably going to need to wait six months, so.

Angela: Sorry. Yeah, unless you want to buy him out? Which you don’t. So, all right. So first of all, you have to decide, you have to know your market. So not just knowing when their lease is up, if you’re deciding to sell it retail. It’s also important to kind of know what market you’re in are, you know. Is it favoring buyers or sellers? How fast are properties moving? What can your house sell for? I mean those are all important things to know so that you have the correct expectations going into this.

Ron: It’s also really important to you that whoever you’re working with knows the retail market, right? So you wouldn’t call me in one of the markets that I’m in and say, Ron, I want to retail my house. What’s a good price? Because Ron doesn’t know. In addition to that, I also don’t know, when I walk through the house, I’m not the guy who can go through there and go, man, if you just did this, this, and this, you could get another $15,000 grand out of your house. I don’t, that’s not me, okay. I’m not the HGTV guy. I don’t know any of that stuff, right.

Ron: But there are people who do know that stuff and those are the people that you should be working with, right? The people who can walk through and go, man, you have two massive bedrooms. Did you know that if you just built a wall in a closet right here, this home could be a four bedroom and you would get $15,000 more or you know, did you know that if your cabinets were white.

Angela: Well come on, don’t go there again.

Ron: Okay, sorry. So you need to know your market and you need to understand how to maximize the dollar value out of your home, right? Really, really important. Really important.

Angela: So yeah, if you don’t have a, you know, someone on the ground where your property is. I mean, it’s easy if your property is, you know, a couple miles away, you can just find a local realtor. Okay, okay, it’s not easy, it’s easier.

Ron: You still have to have a professional because you are not. So when I sold my house in Utah, I hired a professional. I am a real estate broker. Could have done it myself. The challenge is, I’m not a retail agent. You want the best retail agent to sell your property is they’re going to get more money than I would write because people are going to come through. And if I were showing them the house and it matched everything they wanted, I would be signing a contract, right. And I would not understand why we’re not moving forward. I don’t get it. And I would probably irritate a whole lot of people because…

Angela: For sure.

Ron: Because if we don’t like the house, why are we not buying it? Let’s just buy it right now.

Angela: Yeah. Yup, Yup. So do your research. You got to find the best on the ground realtor to find you comps that are accurate, to help you price your house, to help you know how to get top dollar for it and to get it to move. So you’ve got to make sure they have a good track record and history. Don’t hire some Newbie. That’s a relative. Sorry, just had to throw that out there.

Ron: Yeah don’t hire your aunt.

Angela: No, no. Or your, you know your nephew that, yeah, just got out of out of realtor school. That’s a bad idea.

Ron: Or prison. Either way.

Angela: Or prison. Yeah. Yeah.

Ron: Don’t hire them.

Angela: Okay. So you’re not, you know, you’re not flipping your house. You’re selling it retail. You’re, you know, you’ve made great profit on it, hopefully the whole time with your tenant. So it’s not like you need to do a huge rehab on it. Hopefully it’s already, you know, livable. But don’t neglect the obvious ways, like cabinets to add value to your house. Okay.

Ron: Do the small stuff that makes a big difference.

Angela: Yes. It doesn’t have to be crazy expensive. Yeah. So some things I did on my house, and I know it’s not the same cause it was, you know, not an investment property, but fresh paint to brighten it up. People love bright lighting fixtures. If your lighting fixtures are outdated, those things are cheap. I freaking, I replaced the lighting fixtures myself, I wouldn’t recommend it. It took longer than I thought, but it’s not that hard.

Ron: Disclaimer, we would never recommend that.

Angela: Don’t do that yourself. But what I’m saying is it doesn’t cost that much to replace lighting fixtures.

Ron: What we are saying that if Angela can do it, anybody can do it.

Angela: If I can do it, yeah.

Ron: If you can’t do it and Angela can do it. We’re still suggesting that you not do it.

Angela: Yes. Okay. Yeah.

Ron: Disclaimer.

Angela: New carpet.

Ron: New Carpet.

Angela: People, and carpet and paint. I just want to say real quick. Are not things that people can overlook. You can’t just say, I’m going to, I’ve seen so many houses that are like, you know, we’ll give you a, you know, we’ll give you money at close to replace the carpet or to paint it. Bad idea. Because they walk in there and you’ve got gross stained smelly carpet or you know, smoke in the walls are gross. Whatever. Dingy looking. Yeah. People can’t overlook that. They’ll just think your house is disgusting, so, and they won’t want to live there.

Ron: And guys, there are websites that you can go to where like Angela saying, where you can get expensive looking fixtures that are not expensive.

Angela: Yeah, exactly. Yeah. So I looked up expensive looking fixtures and then found a knock off ones at Home Depot.

Ron: There you go. Done.

Angela: For like $90 each and they were gorgeous. So there you go. You’re welcome. But anyway, don’t overlook these things. You might think, yeah, I’ll just sell it as is and maybe, you know, get, you know, I’ll take the little head or whatever, but it’s a bigger deal than you think and it’ll make your house sit there a long time if you’re not willing to, um, you know, do those little things to make it look nice. So people want to live there.

Ron: Remember, you’re losing money every month. Both in rent and in the holding costs, right. So you’re losing money. It’s best to just make the thing work list at one time, sell the thing and do it fast.

Angela: Yup. Another little thing I want to say on that, make sure that, you know, you’re pricing it correctly. Once again, I just, you know, make sure you have a very qualified real estate agent because it really turns people off and looks really bad if you keep changing the price or lowering it and it’s on the market forever. So don’t be greedy with it. You got to know what it’s actually worth and price it correctly the first time.

Ron: And a professional real estate agent or broker that is really good at what they do. They want to maximize the dollar anyway because they get paid on a commission, right. So it’s really important to get one that’s not overpricing your property so that they can get a higher commission but they don’t know what they’re doing. It’s really, really important. And the top sales, the ones that actually move houses, they know where the spot is that this, look, this is going to move and it’s going to move quickly at this price. If you price it above this, usually, usually the professionals will go, if you’re going to price it way above this, I’m out because I’m not going to work that hard to sell this property. When I know it’s not going to sell.

Angela: Right. Exactly.

Ron: The professional will turn down the listing if you want to overprice it. Yeah. It’s the amateur that will take it and list it higher, not the professional.

Angela: And that kind of leads us right into the third thing is, you know, know what you want when you’re going into the steel. And you need to be the professional and the business owner. And that means knowing your numbers, right? Knowing the minimum amount that you can get out of this property, knowing the lowest offer that you’ll take. What’s your overall goal for the deal? You know, do you want it to go really fast? Are you waiting for the absolute best offer you can get? How long can you afford to hold it? How long can it stay on the market? These are all questions you need to figure out before you go into it so that you’re not just…

Ron: And, you know, caveat guys, we’re currently talking about normal every day, you know, rental properties. We’re not talking about million dollar, you know.

Angela: Oh yeah, no.

Ron: It takes longer to sell because it takes a unique client, right? That’s not what we’re talking about. So if your investment property is on the upper end of things, you need a different kind of realtor, still need a professional, but you need a different kind of retail realtor, right? There are realtors that specialize in certain market segments and you got to know which one of those you need as well. So just to clarify, we’re talking about the normal, you know, every day relatively inexpensive.

Angela: The houses that we sell and tell people to buy, that’s what we’re talking about.

Ron: Yes. So if you happen to have one and it doesn’t fit into this category, then…

Angela: Disregard.

Ron: Most of everything that we talked about is also right. But now you really can’t skimp on the fixtures. You really can’t skimp on the paint. You know, you really need to make the house look like a little bit better than all the other houses in your price band. And you need a specialized realtor going to be able to help you sell that property in that particular price band in those neighborhoods because it’s a different realtor people. okay.

Angela: Thanks for that Ron. One last thing I want to say about this too, with expectations. Be prepared, if you’re selling retail, you got to be prepared for that inspection. I’m sure most of you have done this multiple times, but I, it’s very rare that inspection goes super well and there’s nothing wrong with your house. And usually your, a typical homeowner type buyer freaks out about every little thing on that inspection and thinks they’re going to be killed in their sleep by things that are ridiculous to, you know, most people. But so you want to be prepared for that and you have to have a plan in place.

Angela: Most things you can do, you know, they don’t cost that much money to repair and it’s usually cheaper to just make the dang repairs than to try to find a new buyer. So make sure you have a plan in place for all the things that might come up in that inspection and be prepared that it’s probably not going to be, you know, smooth.

Ron: Yeah. So don’t get offended.

Angela: Yeah, right. Inspectors find everything wrong with every house.

Ron: And don’t get all pissed off. Again, this is a math problem, right? I mean, sometimes you get this major list of repairs and you’re like, oh no, I’m not fixing that much stuff. This is absurd, right?

Angela: This is ridiculous, my house is fine.

Ron: It’s all tiny. Little stuff’s going to cost you like $1,500 bucks to fix and you’re getting all, you know, up in arms.

Angela: Yeah. I’m sorry to bring mine up again, but I have stuff like a drawer was loose in my, in my bathroom. A cabinet fixture, like the drawer was like the screws were loose in the drawer that took up a big old section on my report, okay. All I had to do was take a screwdriver and go tighten a couple screws. So I mean, that kind of stuff ends up on your report. And it upsets buyers. They’re like, well, the house was falling apart, that drawers loose. So.

Ron: And it upsets the sellers and you know, and, and then the whole deal…

Angela: Turns the whole thing. Yeah.

Ron: Over what mathematically people is not very much money. So, you know, let’s just, just keep your cool when the inspection report comes, look at this thing from a financial perspective instead of from there assaulting me perspective and then you can make a, you can make a financial decision that says, okay, this is really not as bad as I thought it was. So based on that, it’s worth me spending $800 to make these people happy so that I can close my property, not pay more holding costs, not try to find another person, not have this thing sit for another 15 to 30 days. And you got to take into consideration, right? If you get, if you got eight backup offers, you may just say, you know what, screw you.

Angela: Yeah, exactly.

Ron: Right. There are cases.

Ron: But you have eight backup offers. Again, this is a math problem. You can….

Angela: And how long did it take you to get that first offer? That’s another thing, right? If it sat there for, you know, 30 days or whatever and you didn’t get an offer.

Ron: Understand too that the next person’s going to do an inspection, they’re probably going to find the same stuff. Maybe more, you don’t know. And it’s going to take another, it’s going to take 30 days minimum for them to close with their loan. So you’re just, you’re pissing away more time and you’re stepping over dollar bills to pick up nickels. Unless the thing is really, really expensive, whatever they want you to fix and it’s absurd. Because if it’s expensive to fix and it’s not absurd, you’re still going to have to fix it, right. So don’t lose your brain. Sometimes when people are selling properties, they completely go lunatic.

Angela: And they take it personally. You got to know none of this is personal. It’s not an assault on you.

Ron: Like white Cabinets.

Angela: Yeah. Okay. Okay. Okay. I took it personally fine, but don’t be like me. All right.

Ron: Don’t be like, Angela.

Angela: Don’t be like Angela. I’m going to put it on a bracelet and you guys can get it. Okay, so basically what we’re saying here, do your research, use this podcast maybe to, you know, go through and look at all these different aspects of your property and you got some decisions to make before you actually jump out and put it on the market. And you know, if you make all these decisions in advance, it makes your life a whole heck of a lot easier. So that’s all I got to say on this. Ron, you good?

Ron: I was just searching. Don’tBeLikeAngela.com is available.

Angela: Is it really?

Ron: So technically if we wanted to put up a site and sell, don’t be like Angela bracelets, we could. The domain is available.

Angela: All right. Yeah. Is it cheap? Is it like 11 or 12 bucks?

Ron: I also would like you to know that what? Yeah, it’s .99 cents, but it says on the other side, the reason this is great is because don’t, and like our high value keywords, the average is like $2,000 for a website like this. Widely used keywords. So.

Angela: Now I’ve got to go buy it so nobody else does.

Ron: Guys, I want you guys to all know that we had no intention of monetizing our podcast, but it sounds like there may be a side hustle going on here where Angela and I are going to sell.

Angela: Don’t be like Angela.

Ron: Don’t be like Angela bracelets for all of you guys. And we could probably come up with something cool for the guys. Right. We don’t want them to have like a girl bracelet.

Angela: No, no , no. It will be like a cool. Like, you know plastic bracelets that guys wear. Yeah. With the don’t be like Angela hashtag. Don’t be like Angela on it.

Ron: Gender neutral, which will also not get us in trouble.

Angela: Yes. And they’ll be cheap, so.

Ron: That way all of the genders, I don’t remember how many there are, but all of them can wear it and feel like they’re okay. Done. I love it. Don’tBeLikeAngela.com

Angela: Hey, check it out. I’m also on a, you know, more serious note. If you want to check out our podcast, go to GetRealEstateSuccess.com.

Ron: Which is sometimes not serious? Let’s be honest.

Angela: Yeah, I like it. Yeah. Leave us any comments you have, any feedback or we would love if you guys have ideas for future topics that you want us to discuss. Serious or not, and then also check us out on Facebook and Instagram Get Real Podcast and we’ll see you next time. Thanks guys. Thanks Ron. This has been The Get Real podcast to subscribe and for more information, including a list of all episodes, go to GetRealEstateSuccess.com.