All Forum Posts by: Nick Redding

I would finish the accounting program. That way you have almost a gauranteed w2 job as a fail-safe while you pursue RE endeavors.

Also remember: it is never too late to drop out of school.

@John Semanchuk Here's an exact tax rate breakdown by county (2015):

http://www.sccounties.org/Data/Sites/1/media/publications/propertytax2015.pdf

For everyone not familiar, using John's house example in Richland county, school district one would be $200,000 x 6% = $12,000

Then multiply the county and school district millage rate at a total of 0.4321 x $12,000 = $5,185 straight to the tax man.

The rent would go to your LLC bank account. You would then write a check to yourself from the LLC to your personal account with whatever profits you have on a monthly basis as an 'owner draw'. LLCs are pass through eintities so you are only taxed once and most costs are tax deductable.

At this point you may not even need an entity. Especially if you hire a PM company, they will do the dirty work and then cut you a 1099 at the end of the year.

Also, please note that I am not a tax professional, but I did take half of a business 101 class at Devry once.

Thank you @Andrew R. Lucas and @Daniel Roberts. I was hoping that was the case. So it seems as if the tax office goes by sales only, or possibly if the deeded name changes.

Hi All,

I have a couple Columbia, South Carolina properties I am thinking about refinancing to get some cash out. I am trying to figure out what the new tax value would be so I can recalculate the proposed cash flow. Here is the scenario for one of them:

Purchased a year ago for $65K, low and behold, the value used for property tax is $65k. The value is $100k now (after some rehab), so if I 75% LTV cash-out refi, will the new tax value be $100k?

I called the Richland County tax office and they wont divulge how tax values are estimated. I wanted to avoid asking an MLO because they may just tell me what I want to hear.

Any help on this is greatly appreciated because we all know what the investor tax-rate in SC can do to cash flow. Thanks!

It looks like the tax rate used for SC is at the owner occupant rate. Rule of thumb is that you can triple the tax bill for an investment property. 

I have one in the same boat. Next October the state will send out a corrected tax bill at the 6% rate and your mortgatge servicer will adjust escrow payments accordingly. 

Carolyn Fitts at cfittstaxsolutions.com did mine the last two years and I have been very happy. Located off Rosewood blvd.

@Steve Muise,

Keep in mind that SC is a lot tougher than NC in terms of property taxes for 2nd homes and rental properties. This link will help you figure out almost exactly what you will be paying based on what county and school district the property is in:

http://www.sccounties.org/Data/Sites/1/media/publications/propertytax2015.pdf

Property taxes are calculated by millage rate and occupancy status (6% for investment, 4% for your residence). So without knowing the exact millage rate for your part of Lexington county, your annual tax rate I would estimate at:

Purchase Price ($110,000) X tax rate (6%) X millage rate (.500) = $3,300 per year / $275 per month

This would help you determine at least the tax part of your costs

@Kim Puckett The example I used was for the same house to illustrate the difference rates between primary residences and investment properties.

The first table is what the tax rate would be if it were my primary residence: 4% owner occupied rate at .2192 millage = $718.98 per year.

I do own the house as a rental property which is reflected in the 2nd table: 6% non-owner occupied rate at .6312 millage = $3,105.50 per year.

Both examples use the same house valued at $82k. Taxes in SC can make or break your investment cash flow. Although I shouldn't complain too much given that you are in Illinois.