I’m looking at a 3 unit this week and here are the numbers as I see them so far. It’s priced dirt cheap, but I think that is a combination of work that needs done, as well as the high taxes on the property.
Assessed value is $129k (usually about 25% low)
Purchase price $29,000
Estimate $30k rehab (10k per unit) Will find ouRt a solid estimate this week when I see it
Total acquisition costs: $60k
Yrly taxes are really high currently - $7k - not sure how much they will drop with a mortgage exemption
Rents should be around $650 at least.
Each unit is 3bed 1bath and about 1100 sq ft.
I understand how to break it down according to the 50% rule, but would like to know what you pros think since I know what the property taxes are going to be and they are so high.
What mortgage exemption are you speaking of? If this is not a homestead then I would assume there is no exemption. The only way to reduce the property taxes is to get the assessed value lowered.
so what location has a tax rate of roughly 6% of the assessed value??? I’mcurious that’s 5x higher than even Calif. Don’t let the politicians in Sacramento know as they pull this junk on us too.
Our county here in Indiana has some really ridiculous tax assessments in certain pockets and areas. Some areas, aren’t bad; others may have $3000 worth of taxes for a house in a low income area that no investor would pay anymore than $15-20k for.
That’s what good the local government here does for us…
While overall, Indian is a red state, there’s a lot of blue around the edges of thestate at the Congressional district level…blue normally represents higher local taxes…
Yeah, Keith - and it’s a big blue spot right over where I live and invest. It’s all that dirty Chicago influence coming over into our area politics. There was a big bust the other day involving the police chief and a bunch of officers, over some alleged drug ring indictment where they held the supsects and beat them for an extended period of time…good ole chicago politics are spreading…
…okay, so nobody has any input on how they approach a property with super high taxes? I know it’s priced right, but I’m just wondering if you still take on deals like this when the taxes are so much…
If the overall numbers work (and they seem to - $1,950+ per month income for a $60K invetment), then it’s probably a good deal. I would certainly buy it, even with the taxes.
Do you know yet how certain the $10K/unit rehab is? Is the rehab internal only? How’s the roof(s), the furnace(s), the air conditioner(s) - the big ticket items?
It may also lend itself nicely to a fix-and-flip, if your numbers are accurate…$60K in with a $125+ out is pretty good.
yeah, it’s vacant. I talked to listing rep about viewing it and he sent me a mold release of liability form from HUD to sign - and I’ve been told there is a mold issue in the lower unit, but I haven’t been there to see the extent of it yet.