A high property tax rate will increase the taxes more quickly as a percentage of total expenses when the property value increases.

Deduct NEW property taxes after you buyDeduct home insurance costsDeduct maintenance percentage, typically 10%Deduct vacancy+tenant nonperformance percentage(we recommend 5% for Class A, 10% Class B, 20% Class C, good luck with Class D)Deduct whatever dollar/percentage of cashflow you wantNow, what you have left over is the amount for debt service.Enter it into a mortgage calculator, with current interest rate for an investment property, to determine your maximum mortgage amount.Divide the mortgage amount by either 75% or 80%, depending on the required down payment percentage - this is your tentative price to offer.If the property needs repairs, you'll want to deduct 110%-120% of the estimated repairs from this amount.Be sure to also research the ARV and make sure it's 10-20% higher than your tentative purchase price.As long as the ARV checks out, this is the purchase price to offer.It is probably significantly below the asking price.

Rates will at some point allow you to refinance.  

I wanted to help them out and minimize their loss and saw an opportunity to get a property slightly below market because of my commission savings, immediate mortgage and maintenance relief, in addition to keeping a lower short term interest rate How did you find this deal and how did you negotiate it?

If someone offered to finance this house to you at your current rates if you put down $250k would you do it?

@Arlinda RexhoWhen considering a 32-64 unit multifamily property in Texas, focus on strong locations with population growth, proximity to amenities, and low crime rates.

When it's sold it will be taxed as capital gains tax and may also have some unrecaptured depreciation which is capped at 25% and  recaptured depreciation as well which can be up to your ordinary income tax rate.

Thankfully we are commercial bank clients so our rates are as low as you can get in the market place for anyone who is not Lennar or DR horton or those types.

I agree with others have said, if they can make 24% return, why wouldn't they just borrow at a hard money rate and just make the 24% themselves.

Contact me PlzPS - Since 2003, Dean & DeWitt Property Management has helped investors buy, sell, and manage investment properties in the St.