All Forum Posts by: Luke Stone

Sounds like estimate taxes at 100% of the purchase price? For my job I do a lot of research on the Chicago market and tax assessments are generally significantly less than purchase prices even 3-4 years after acquisition. So I guess I'm trying to figure out at what amount people estimate taxes at?

Hello all,

I'm wondering what assumptions you use for real estate taxes you use when acquiring a new multifamily property? I'm particularly interested in the DFW area since taxes are such a large expense in this area. Do many of you see tax appraisals increased to near your purchase price t get year or two after acquisition.

I look properties that are being sold at 6-6.5% cap rates, but those cap rates are calculated based on current taxes. Once you apply new tax assessed values at the purchase price the cap rate goes through the floor. I have a lot of problems getting deals to pencil out, even though many of them seem decently priced on price/sf comparable basis, $75-$90/sf. Am I just being too tough on taxes? Maybe to a lesser extent insurance?

Thanks all

Hi, apologies for the slow response. So my situation resolved itself in time. The tenant/ did not damage the property beyond a couple of items of standard wear & tear. However, they did not leave on their own. I had to pay a county constable fee and hire movers to remove their items from the property. We did not have to store the items, just set them on the curb. All in the whole process including filing fees, constable fees and mover fees cost about $1,200. We managed to save on attorney fees as my dad did a bunch of research online and appeared in court himself. Few things I learned. 1. Tenant screening, tenant screening, tenant screening! Although in this case these were inherited tenants from the prior owner. I don't think he screened them since he was selling. 2. Evictions in Texas, while stressful, are relatively fast and cheap compared to many other states. The whole eviction process took approximately a month and could have been quicker had we knew what to do. With that said there's no way to speed up the state mandated waiting periods for each stage. This means you need to be prepared and somewhat familiar with the eviction process before the need arises. Be sure to post the proper notices on the first day you are allowed. We were tempted to give them a couple of extra days to make the payment and not post the eviction notice. Instead of doing that I think it's better to post notices and then explain that the whole process stops once the past due amount is paid. Lastly, I'm not too sure on differences between counties. My guess would be there are no differences, as county law is determined at the state level. There would more likely be differences at the city level. I.E. Dallas vs Ft Worth.

I'm digging up a little bit of an old post here, but have an important HAP HUD contract question.

If purchasing a property that has HAP contracts in place, at what point do you obtain approval from HUD to be the owner? Does it generally occur before closing of the sale or after? My assumption is that it would be before, but am having trouble navigating the process. Also does tenant voucher based HAP program vs project based have any impact? The property is in Chicago if it matters.

Thanks in advance

That's about the time line I was thinking. Thank you for the tips. I'm getting my movers lined up and looks like it will be the beginning of next week when I get the constable out.

Oh okay! Any idea how long it takes to get the constable out to the property after I file the writ? Is it something I can have done the same day or does it take a day or two process?

I am having problems with a tenant that I am in the process  of evicting. I recently won an eviction to remove a tenant from a duplex due to non-payment (partial payment) and having unauthorized occupants in the house (4 additional people last month). In Texas, the court give the tenant to 7 days to voluntarily move out, which I am currently in and will end on Thursday. 

The problem is over the holiday weekend, the tenant had a 4th of July party and appears that more people have stayed in the house overnight. I'm concerned that they may be damaging the property, if not intentionally, just recklessly not caring. There is no evidence or exterior signs of damage to the property. The only thing I have is the tenant in the 2nd unit of the duplex stating there was an unusual amount of traffic in and out. Is there anything I can do to have the tenant removed prior to the 7 day waiting period? I figure there has to be a provision if the tenant turn adverse and damages the property.

I don't believe the title insurance is more expensive. It's the T42 rider and endorsement that is insuring the additional fees. Based on speaking with my loan officer they are OK. They have loan as an investment property. The loan officer asked me to call the title company bc he didn't fully understand the issue. When I spoke with the title company they said their underwriter was considering the property a homestead property due to me only owning one home. 

I'm definitely going to float the non-homestead affidavit.

Sounds like I should try switching title companies? 

The title insurance company is requiring a Home Equity T-42 rider and T42.1 endorsement. I guess the issue is the difficulty foreclosing on a homestead property is why they want the additional rider/endorsement.