All Forum Posts by: David Chwaszczewski

@Mike Warder Contact your lender now, unless you have a chunk of change to pay at the end of the year.  Taxes in SC are not cheap for investors. 

@Russell Brazil@Patti Robertson SC is not a very investor friendly state when it comes to taxes.  The way it works here  in York County is its 4%  of the appraised value if you are owner occupant and 6% non-owner occupant.  However you have to times that number by the millage rate and get your true tax's (millage rate changes per county and change from owner occupant vs. non-owner occupant).

Owner Occupant EX:  $100,000 Appraised value X 4% X .2183 = $817.20

Non-Owner Occupant EX:  $100,000 Appraised value X 6% X .3957 = $2374.20

When we buy we stick to 2% rule just to know we can pay taxes.  It stinks!

Here is a link to SC TAXES by County

@Dave Toelkes that is good news as I want to get a beach property in horry county one day.  Near me all the counties  millage seem to differ for owner and non-owner occupant. I wish it didn't, I would have more properties.  Thanks for the info!

@Chad Phillips not sure what the 50% rule is. 

Her is my 2 cents:  property needs $7500 in Reno. You break even every month.  First tenant moves out and you have to clean carpets, paint and repairs $1200. Now next tenant moves in and lasts 3 months and stops paying, now you need to evict.  2 months go past waiting for court date. Now tenant moves out and you need to repair and clean and.......you see my point. This is the reality of being an investor. Things happen and you need to be prepared for it. It's a business. Sell now and take your money and buy a better cash flowing deal with less risk.

I would be more concerned that the tax rate jump will leave you paying a few hundred out of pocket every month. 

@Chad Phillips I assume 1250 is PITI. One thing about SC is you are being charged 4% owner occupant taxes. When you purchase your new home you become non-owner occupant your taxes will increase to 6% and a higher millage rate for investors. This will eat up your cash and leave you paying every month. Here is an example of taxes in my area of SC.

Non owner occupant : 100,000 assessed value X 6% X .3296 millage rate = $1977.60

Owner occupant : 100,000 assessed value X 4% X .2152 millage rate = $ 860.80

Here is how i would run the numbers with information you provided:

Rent: $1600

Monthly Expenses (you need to put this away every month):

Vacancy 7% = $112

Repairs 5% = $80

Property Management 10% = $160

Total: $352

Now $1600 - $352 = $1248 leaving you $2 short to pay the MTG.

I would say that the home is not cash flowing and I would sell it and get the equity out of it.  Since it was your primary residence and you sell it and purchase a new home you will not have capital gains tax.

@Oyama Lewis  not only are you taxed 6% of assessed value, you are also charged at a different millage rate as an investor. 

Ex in Rock Hill non owner occupant : 100,000 assessed value X 6% X .3296 millage  rate = $1977.60

Ex in Rock Hill owner occupant : 100,000 assessed value X 4% X .2152 millage rate = $ 860.80

Before you buy any property in SC call the county tax assessor and they can give you the exact taxes for year. Also ask when last assessment was done and when they are planning on reassessing the area.  If you buy this year and they reasses next year you could be paying much higher taxes next year eating up cash flow. 

@Gary Montgomery Here is a link to your answer:

SC TAXES

NC doesn't change taxes on owner occupied Vs, non-owner occupied.   If you are new to SC you need to know your taxes.  This can be the difference in a good deal or money pit.   If you have any questions feel free to PM me.  I have several rentals in Rock Hill.   Hope this helps.

@Bradley Bladon this is where many new investors/wholesalers go wrong in my opinion.  When you wholesale you have to buy the property with your money or borrowed money to close.  If you resell the property 10 min later at a profit to a buyer in next room there is no legal issues and any closing atty can get this done for you since it is your property. Wholesale is buy low sell low for profit. 

Assignment is exactly that, assigning the contract and not using any money of your own or taking ownership of the property. If you never plan on taking ownership of the property, you are selling the right to purchase the contract from you for a fee. Now saying that you need to be careful how things are worded because it could be viewed as you are acting like a realtor and practicing real estate without a license. Ex: is showing home to buyer if you do not own the property. That is what a realtor does. Most atty will not have an issue with an assignment fee as long as it's disclosed to seller and buyer on the HUD.

Ex: you have contract with HO to buy at 50K. You assign contract to buyer for 55k. At closing the buyer brings 55k to table. On HUD you will see your FEE for 5k and 50K to seller. Now remember there are closing costs and other fees involved and you will need to make sure the buyer or seller is paying them. Let's say that the seller paid them in this case, then 2 checks will be given at closing. One to seller for balance after closing costs and one to you for 5k. Buyer gets house. Hope this helps.

@Bradley Bladon I think you have to step back a second.....If you are WHOLESALING a property then it will be a typical transaction. Wholesale means you buy the property and take ownership of it, then you will sell it at a discount to another buyer. If you are assigning a contract, then you are selling the rights to the contract to purchase the home. We buy homes on assignment and don't have any issues at all. It needs to be disclosed on the HUD. There is nothing wrong with that at all in SC (as of now).

@Stephen Ross Not sure why you would pass on a deal for the taxes. IF you are going to WHOLESALE a deal in SC you only will be responsible for the taxes during the time you own the property (assuming the taxes are current at time of closing when you purchase it). Wholesale means you buy the property and then you sell the property at a discount, and usually have a buyer ready to close on it right after you buy it. If you are assigning the contract to another investor (meaning you are not buying the property), the property taxes are typically going to be paid on the HUD and not by you. You will just get your agreed upon fee for the assignment of the contract between you and the seller paid on the HUD by the buyer. Remember you are not selling property, you are selling the contract to purchase the property.

As far as the taxes go, SC charges non-owner occupants 6% of the assessed value of the property Vs. 4% for owner occupant.  Then they times it by the millage rate to get your taxes.  There is a millage rate for owner occupant and non owner occupant. 

Ex in Rock Hill non owner occupant :  100,000 X 6% X .3296 = $1977.60

Ex in Rock Hill owner occupant :  100,000 X 4% X .2152 = $ 860.80

If you are not planing on holding the property then i would not worry about the taxes.  I hold several rentals and the taxes eat up the cash flow.  So if you plan to have rentals in SC you need to factor in your property taxes.

Here is the link to York Co. Millage rates.

York Co Millage Rates

@Sloane Rowan Curtis and Deb are correct.  SC is not an investor friendly state. In fact, taxes for no owner occupant are so high it kills most of our deals.  I have a property that the owner paid $430 per year in taxes and I am now paying over $1200. Stick to the 2% rule if you decide to invest in SC.