Challenge those property taxes!

[Ronald Perich]

I had the opportunity to purchase a nine-unit complex last August at a great price, but it needed a lot of work from both a resident retention (and reduction) and deferred maintenance perspective. The 8 two-bed, two-bath rents were in the $600 to $625 per month range, but only about half the residents were paying and three of the units were vacant. The 1 bed studio had been empty for about four years. It's a "B" area and was probably a C- property at best. 

My total cost was right at $200K. The previous year's taxes were just a touch over $12,000. I bought it on Aug 31st. (That was a mistake. Always buy it, if you can, sometime after the 1st of the month for the rent credits.)

Back to my point, nine days after I purchased the property, I walked into the assessor's office with all of my paperwork to get the valuation lowered from the $475K they had on it. I only had until the 12th of the month per statute, so I got somewhat lucky there. Sometimes, timing is everything.

My property tax bill just came in at a touch over $5K. That's $7,000 more in cash flow! 

If you just purchased a property, check to see if your purchase price is less than the valuation provided by your county. If it's higher, challenge it!

To your investing success!