All Forum Posts by: Andy Webb

The 10% cap on increased values is for homesteads; on investment property they can take you up as much as is dictated by the market.  I personally have seen houses come in anywhere from -10% YoY (yes, they dropped the value on a few last year, don't ask me why, but I will take it), to an 80% or more increase on the prior year.  No cap.

But we do have recourse through the protest process.  Typically I get those big increases reduced to something more palatable, often close to the 10% increase we would have seen for a homesteaded property.

Generally it is pretty straight forward to lower your tax appraised value to your purchase price - just show them the closing docs with the purchase price.  

Right now it is difficult to protest based on sold comps (market value).

Other avenues include protesting based on condition (e.g. deferred maintenance - show pics and contractor bids); "depreciation" - the counties will use some sort of qualitative assessment, e.g. in Dallas County it is called "Desirability" and can include levels like "Good", "Average", "Fair"...I find it pretty easy to get these lowered from one level to the next; "equity" comps - what other similar houses show as valuation on the tax rolls.

I do this myself each year.  There are some nuances of course. And if you are out of state or don't have the time, as @Carson T. mentioned, just hire a protest firm that will do it on a contingency basis.

Andy

Not sure where you are based...here in Texas the lease conveys - it stays with the property as an already executed contract.  I cannot go in an re-write an existing lease.  Confirm with your state's property code or a qualified real estate attorney how this is handled where you are.

Buying more SF rental houses and getting into MF passive deals and socking cash away for our own solo MF deal...

Sounds like it is time to let them go (unless they can stomach that crazy increase) and bring that unit up to market rent. 

Chasing a 4-year-old around the house and backyard.

Inventory is pretty tight and it is very competitive right now. Patience is a key if looking on MLS; alternatively work the off market deals, but be careful with the wholesalers out there. Have you spoken with a lender to see what you qualify for as far a loans go? If not, start there.

@Rebekah Nation - Anyone 18 and over should submit a complete application and be run through your full process.  Apply it to everyone every time.  You want them on the lease, among other things, to hold them accountable to the lease - it is a contract.  A recent example: A landlord friend just move a family of 5 into a sizable home; parents are paying the rent as it were, but he ran all 3 adult children through the process as well and put them on the lease.

RE the lease language around "Vacating" (e.g. death) - talk to a real estate attorney in your neck of the woods. 

Andy

@Matt Wells - it's like saying an elephant is a mammal, but a mammal is not necessarily an elephant.

A cash-out refinance is a type of refinance, but you can have other types, most notably rate-and-term refis.  In the latter case you are changing the terms of the loan, but not necessarily pulling out cash. In a lot of cases you can't pull out much cash (we can usually pull up to $2k out).

You posted this in the BRRRR section, and commonly with that strategy we are buying a property with a high-interest, short-term hard-money or private money loan (think construction or bridge loan), then once the renovations are done, doing a rate-and-term refi to roll into a different loan with a lower rate and longer term. E.g. going from hard money with a 12 month term and 12% interest, into a long-term Fannie Mae backed loan with a 30-year term and a great fixed rate of 2.75%.

Andy 

@David Wright - Have you given thought to your model?  Single-family or small multi-family?  Rehabs or rent ready?  What sort of cash-on-cash or other returns?  

Andy

@Bishara M. - property taxes are high in Texas and unless you are headed out to more rural areas, I would not waste a lot of time considering one municipality in DFW vs another from a tax perspective.

Here is the good news: you are house-hacking, so that means at least for the interim you will be an owner-occupant - this will be your"homestead".  Be sure to register the property as your homestead with the county appraisal district to get the homestead exemption.  That limits the amount of increase in value that they can assign your property from year to year to 10%.  Compare that to some of my rentals (absentee owner) where I have recently seen an 80% increase!

Buy right and secure a low entry price and protest your appraised value down to your purchase price with the county - in other words start low; then put the homestead exemption into place, and they can only take you up 10% per year (max) - in other words slow the increase.  That will be your best approach to limiting taxes in the short to mid-term, until you vacate the property.  If you keep it as a rental, once it is no longer your homestead be ready for the value to jump.  And continue to protest the tax value EVERY YEAR.

Andy