All Forum Posts by: Franklin D.

Those property taxes sound brutal. But I assume the loan costs are tough too. It's really hard to BRRRR in this rate environment. You'll probably have to leave some money into the property. Although you should challenge the property taxes with the county I would think. Perhaps they have the house valued way higher than it should be.

Thank you for the reply,

Property taxes are definitely insane. I have co-workers who have challenged the value and few have succeeded. The values are actually accurate to market rate of the houses. I am curious if the sudden high property tax values here will raise rents due to even less people being able to afford to purchase with high rates combined with high prop. taxes, and landlords having to compensate for higher property taxes.

I have also looked at purchasing with the plan to refinance whenever interest rates go down but that is unpredictable. It would also mean paying another round of closing costs. It would save 150 a month but take 55 months to "pay back" closing costs.

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Good evening,

I have come across a "discounted" property that needs relatively little work to be rented but there is no cashflow.

My market has very high property taxes and it is "impossible" to cashflow with todays rates and still tight with a lower rate in the future.

Purchase 140k

ARV 200k average

150k loan with 10k rehab included

Holding costs, closing costs, origination, 4 months (hard money) : 10,250

Refinance to 150k loan at 75% of 200k.

Refinance closing costs 6k

Overall I would have to leave 24k in if it appraises at 200k and 16k at 210k . I am OK with that as I could do this a couple times with the money I have saved.

This property barely breaks even but the numbers are far better than anything else I have found. It would create immediate equity and eventually rents would catch up but that could be a few years.

With the new seasoning rules you have to wait 12 months from creation of your last mortgage to refinance and pull cash out. Has anyone found a way around this?

Am I looking at this from a wrong angle?

How do I combat high property taxes that kill every deal? (Besides out of state investing)

Is it worth it to leave 25k in to sell and receive 50k after selling costs more or less in 1-2 years and avoid "flip taxes"? If I put 25k into stocks and pulled out 50k 1-2 years later I would be more than happy.

This is my first deal and I am just trying to get over the initial hurdle of the first property.

*Edit*

Property taxes take almost 33% of the rent.

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All Forum Posts by: Franklin D.

Franklin D. has started 1 posts and replied 12 times.

Post: BRRRR no cashflow

Post: BRRRR no cashflow