All Forum Posts by: Steve Muise

All,

I plan on contacting the potential seller this week and educate him on the tax rate for his home as a rental.  I pulled up current tax bill which is $864 (owner occupied).  Tax bill as rental will be $3844.

Either he knows it and was hoping I didn't or I'm going to ruin his weekend.

Recognize now the wisdom of the 70% rule in this case.  Would cash flow great at $85 - $90.  Very good at $95K and OK at $100K.

Thanks all for your feedback. Greatly appreciate the different viewpoints.

Tax card has taxable value at $119.5K which means taxes for 2016 are $3844 as rental home.  He's been paying ~ $825 as primary while he's been renting it.  He'll flip out when I tell him this esp. when he finds out he may be on the hook for the last 5 years.

Khaled,

Thank you for your feedback.  I tend to agree with you.

Have been informed by customers who live in the area that it's still a desirable area (excellent schools) but that neighborhood / area of town is further from the lake so not appreciating like other areas.

Therefore I'm thinking $110K max and start out closer to $100K or below.

I understand your point.  This guy doesn't seem too on the ball.  It looks like he over paid in 2005 ($138K) based on other sales I looked at during that time frame and I think he's got the SF wrong (not 1600 but 1350).

My guess is someone that clueless isn't going to understand your point about value for investors.

As to the property tax issue - he may not even be aware of it.

I found out about it from another customer of mine who lived in a townhouse in same town until he got married.  He rented it for several years and continued to pay the $650 tax.  Got a notice from the assessor that his rental tax rate was $2400 and they went after him for the previous 18 months.  He had no idea. 

I researched it and it looks like the whole state of SC calculates PT that way - not just certain counties.

Will be getting more info over the next week and do some more number crunching.

Thanks again for your feedback.

Thanks Brent.  

Do you use the flipping formula for a buy & hold? If so, I calculate using realtor.com ARV of $130,600:

($130,600 x .7) - $6000 (HWH + HVAC + carpet) = $85,000 MOA

Unless I'm missing something, I don't see that as even in the ballpark.

Based on my calculations I can get fair ROI $115 - $120K and good ROI $110 - 115K

...that came out of nowhere a day ago.

One of my customers for my FT work who own several rentals and knows I'm getting into the business contacted me about an acquaintance of his. This guy bought a tract home in 2005 for $138K (built 2003) and later moved to a bigger home.

He's rented the house for 5 years (1 tenant in that time). He wants to sell because he's getting a divorce. Talked with him on the phone to get some basic info and he said the home was 1600 SF and he thought homes were selling in neighborhood for $135 - 140K.

My customer's wife is RE agent and she's going to check comps for me but I did search myself.

Subject home is listed as 1680 and 1350 SF depending on the source so I obviously need to confirm that info (did someone count the garage in the SF ?! )

Most recent comps from neighborhood I could find are (all with 2 car garage):

09/16 $138K 1245 SF 3/2

04/16 117.5K 1298 3/2

03/16 115K 1302 3/2

10/15 153.5K 1860 3/3

9/15 120K 1382 3/2

7/15 133K 1528 3/2

4/15 136.5K 1702 3/2

3/15 137K 1382 3/2

Homes in neighborhood were selling $120 - 130K new in 2002/03 so no real appreciation.

Home located in Lexington, SC which is probably the most desirable suburb of state capital (Columbia) and has one of the top school systems in state.

Roof, HVAC, HW heater all original so I know they'll need replacing soon. Have not seen inside but I suspect carpet will need replacing.

Taxes in SC are kind of funky in that owner occupied are about 1/3 of rentals for same property. Owner told me taxes are $800 which is the rate for owner occupied and was confirmed by some of the sources I checked out. Based on what I know, taxes for the house as a rental will be ~$3000

Owner said he'd be willing to negotiate - said he wants to get rid of it. He wasn't even sure what the rent was just that the PM sends monthly check of $1035 which tells me rent is $1150 - $1200 which is market rate for area.

I plan on getting some more info and definitely do a walk through before considering an offer.

If I decide to make offer will ask what he wants first and then counter.

Those of you with experience - what do you think would be a good starting offering/max offer based on the above info?

Thanks in advance for your feedback.

Guess I posted this in wrong forum.  Will repost in deal analysis.

...that came out of nowhere a day ago.

One of my customers for my FT work who own several rentals and knows I'm getting into the business contacted me about an acquaintance of his.  This guy bought a tract home in 2005 for $138K (built 2003) and later moved to a bigger home.

He's rented the house for 5 years (1 tenant in that time).  He wants to sell because he's getting a divorce.  Talked with him on the phone to get some basic info and he said the home was 1600 SF and he thought homes were selling in neighborhood for $135 - 140K.

My customer's wife is RE agent and she's going to check comps for me but I did search myself.

Subject home is listed as 1680 and 1350 SF depending on the source so I obviously need to confirm that info (did someone count the garage in the SF ?! )

Most recent comps from neighborhood I could find are (all with 2 car garage):

09/16 $138K 1245 SF 3/2

04/16 117.5K 1298 3/2

03/16 115K 1302 3/2

10/15 153.5K 1860 3/3

9/15 120K 1382 3/2

7/15 133K 1528 3/2

4/15 136.5K 1702 3/2

3/15 137K 1382 3/2

Homes in neighborhood were selling $120 - 130K new in 2002/03 so no real appreciation.  

Home located in Lexington, SC which is probably the most desirable suburb of state capital (Columbia) and has one of the top school systems in state.

Roof, HVAC, HW heater all original so I know they'll need replacing soon.  Have not seen inside but I suspect carpet will need replacing.

Taxes in SC are kind of funky in that owner occupied are about 1/3 of rentals for same property.  Owner told me taxes are $800 which is the rate for owner occupied and was confirmed by some of the sources I checked out.  Based on what I know, taxes for the house as a rental will be ~$3000

Owner said he'd be willing to negotiate - said he wants to get rid of it.  He wasn't even sure what the rent was just that the PM sends monthly check of $1035 which tells me rent is $1150 - $1200 which is market rate for area.

I plan on getting some more info and definitely do a walk through before considering an offer.

If I decide to make offer will ask what he wants first and then counter.

Those of you with experience - what do you think would be a good starting offering/max offer based on the above info?

Thanks in advance for your feedback.

Looking for an agent who is familiar in the REI market. My goal is to purchase (4) SF investment properties over the next 24 months and perhaps as many as 8 investment properties longer term. Plan on starting March/April 2017. Would like to discuss particulars with agent looking to partner with buyer to create win/win situation.

William - I'm going to end up talking with several RE agents to try and find one interested in a long-term relationship since I'm looking to purchase multiple properties.