Buying apartment complex in January vs December

[Nicholas Lovric]

Hey Investors,

One of my biggest learnings when buying a apartment buildings (5+ units), Close in the first week of January if possible. This cost me $15k additional.

Two things you’ll benefit from:

1. Before buying the property, The city valued the property at $1.1M and I paid $1.7M. We closed December 2nd 2019. Because we closed in 2019, the school system appealed my taxes to be raised on a value at $1.7M and won. In commercial real estate, you pay 2019 property taxes in 2020. Therefore, in my situation, I had to pay an additional $15k for my 2019 property taxes. If I would have waited one month, I would have saved $15k. No matter what my property taxes were going up based on what I paid and I knew this for 2020 property taxes but didn’t realize this was also the case for my 2019 property taxes.

2. This can apply for any beginning of a month closing, not just January. At closing all rent will be prorated, meaning you’re guaranteed that rent. You don’t have to chase tenants down.

Hopefully this helps

Cheers

Nick