All Forum Posts by: P.J. Bremner

I have been looking to expand my portfolio in Cleveland Oh, have a good company lined up for that but apparently Berea is too far for them.  Does anyone have property in Berea?  What property management company do you use?  What are your thoughts on this city?

From what I can see, it's a very nice area but would love to hear from some locals.  Thanks in advance for your help!

@Jeff Brower

Okay, it makes more sense now.  So when I'm estimating my future property tax bill, it's safe to use their number if the purchase price is lower and 100% accurate to use the new purchase price if it's higher than their previous market estimate?

Side question: is it ever worth trying to petition their numbers or is it a fruitless endeavor? (Not so much the obvious big errors like market value of $200k when the house clearly is in the $100k range, those I would fight tooth and nail, but the smaller, off by $20k etc.)

@Federico Gutierrez I see, so they base the taxes off of the market value and not the assessed value.  I could be mistaken, but they do things different out here on the west coast, this is great information to know.  So just to make sure we are both on the same page, it doesn't really matter what the purchase price is as they will base the taxes off of their "market value"?  They don't care about the purchase price?

@Federico Gutierrez

So for this property, my math to estimate looks like this:

Property Taxes = $1370.30 x 2 = $2740.60 for the year

Property Tax Rate = Annual Taxes / Assessed Value = $2740.60 / $35,180.00 = 7.79%

Property Tax on Purchase = Property Tax Rate x Purchase Price = 7.79% * $100k = $7,790

This number seems really high, but then again I'm not that familiar with Ohio.  I've seen estimates in the 1.5% up to 4.5% but almost 8% seems really high so I wanted to double check.

@Jeff Brower

@Federico Gutierrez

Thanks for the heads up, I had tried to look on one of the county assessor's site but didn't have much luck.  I must have entered in the data wrong because I tried it again and it worked.  However, I am not sure how to interpret everything that is on there.

I've attached a screenshot of the 2016 taxes - I can see the standard taxes due at the top but what is the rest of that junk?  Is that the previous owner not being able to pay their bills and the city attaching liens to the property?  My main concern is what are the REGULAR taxes that will be due after I purchase the property (ie. will the street "Lites" and sewer stuff still be there after they are caught up)?  It would be nice to know the % that I can multiply to my purchase price so I can estimate taxes.

I've been analysing a ton of deals in Cleveland area for buy-and-hold and the biggest variable that I have not been able to efficiently estimate is the property taxes.  I notice that on some sites, they estimate taxes as low as 1.5% and it can go all the way up to nearly 5% (even within the same zip code).  I realize some areas have crazy taxes, but how do I know for sure which ones?

In Southern California, where i'm currently located and have a few rentals, it is much easier to get property tax to within a few bucks per year (I use 1.33% x purchase price) and it pretty much doesn't deviate from that by much, even going from LA county to San Bernardino or Riverside county.

Thank you in advance for your help!

For me, it really comes down to one thing: Availability of the deal.  In a perfect world where you have more deals than you have money to purchase all the deals, my focus would be on multifamily.  In the current market where deals are a bit harder to come by and money tends to sit idly, I will take whatever I can get as long as the numbers make sense.  Just one point of view, curious to see other's though.

@Adalberto Jimenez

You can look at sold data just like any agent can.  I personally use Redfin because I have grown accustom to their platform.  Here is how I typically do it:

- Zoom in on the subject property and go a few blocks out (i'll typically look 4 - 5 blocks out in each direction).  Make sure to not look at anything on the other side of something major like a freeway or a main street as these tend to be different and not comparable.

- Look at sold properties within the last 6 months.

- Make sure you filter your search to match the subject property with some wiggle room in there.  (Example - Subject property is 1,000 sqft so I will look at anything 750 - 1250 sqft because this is the range Redfin allows me to look at (agents usually go 200 +/- sqft).  If subject property is 3 bedroom, I limit the search to 3 bedrooms, etc.)

- Look at pictures to make sure they are comparable as well.  If the subject property was a flip and is A++, then you can't really use that turd down the road that needs a full gut as a comp.  I'm typically looking at turds, but looking to flip them so I only look at fully rehabbed homes for my data but will look at the other turds to make sure my buy price is reasonably in line.

While this isn't exact, it will get you in the ballpark close enough so that when you find a good one, you can have your agent run legit comps for you.  The last thing you want to do is ask an agent to pull endless amounts of comps for you and waste everyone's time.  Hope this helps!

I tried to post on here before to get in touch with wholesalers in the Cleveland area, but they removed the post thinking it was advertising.  So I am curious how to get in touch with more wholesalers in the Cleveland Ohio area?  I am not local so attending local REIAs is not an option.  I have a couple people that can manage and rehab, just need to get more deal flow going and I think wholesalers might be the best way to get there.  Any ideas?

@Isiah Ferguson

That quote does sound high, at least from my experience.  I had an entire unit installed in a 1,400 sqft house (actually I had a bigger unit installed, rated for 2,000 sqft) and it was just at $5,000.  I've used this same guy for 4 other AC installs on bigger homes, nothing was over $6k.  

I'm curious to know where you are getting these quotes from?  Maybe you should ask for a local referral and stay away from the guys that advertise OR you can set things up before you get the quote.  Find out from BP what a reasonable price is, then tell the contractors that you are getting a couple quotes and they are coming in around $X,000 so if they want to stay competitive they can match or beat that price.  Often times, experienced contractors will rip you hard if they think you don't know what you're doing.  If they know you're price shopping, they will either try to compete to earn your business or flat out tell you to use the other guy because his price is too good.