From the BiggerPockets Blog

 BiggerPockets Blog »

Jump to Forum View All

Click a category below to view different forum categories.


General Info

BiggerPockets Q&A, Site Questions, & Announcements

1504 topics, 14360 posts — Last Post 04/15/14, 08:53PM

BiggerPockets Exclusive PRO Area

116 topics, 834 posts — Last Post 04/15/14, 11:19PM

New Member Introductions

10838 topics, 85176 posts — Last Post 04/15/14, 11:33PM

Real Estate Success Stories

391 topics, 6092 posts — Last Post 04/15/14, 11:38PM

General Real Estate

General Real Estate

Buying & Selling Real Estate

5897 topics, 46516 posts — Last Post 04/16/14, 12:18AM


640 topics, 5788 posts — Last Post 04/15/14, 06:49PM

Get Foreclosure Help - Help Stop Foreclosure Forum

316 topics, 2556 posts — Last Post 04/15/14, 07:51AM

Home Owner Association (HOA) Issues & Problems Forum

236 topics, 1602 posts — Last Post 04/13/14, 02:11PM

Do it Yourself

653 topics, 6251 posts — Last Post 04/15/14, 11:23PM

Reviews & Feedback

Real Estate Deal Analysis and Advice

3650 topics, 29286 posts — Last Post 04/15/14, 11:16PM

Real Estate Guru, Book & Course Reviews and Discussions

1129 topics, 11527 posts — Last Post 04/15/14, 10:37PM

Ask About A Real Estate Company

736 topics, 7286 posts — Last Post 04/15/14, 02:45PM

Real Estate Investing

Real Estate Strategies


5580 topics, 43634 posts — Last Post 04/15/14, 09:15PM

Rehabbing and House Flipping

3317 topics, 30838 posts — Last Post 04/15/14, 10:31PM

Real Estate Development & New Home Construction

551 topics, 4678 posts — Last Post 04/14/14, 01:02AM

Innovative Strategies

698 topics, 5991 posts — Last Post 04/13/14, 06:35PM

Tax Liens, Notes, Paper, & Cash Flows Discussion

863 topics, 6640 posts — Last Post 04/15/14, 06:59PM

Rent to Own a.k.a. Lease Purchase, Lease Options

689 topics, 4846 posts — Last Post 04/14/14, 04:40PM

1031 Exchanges

142 topics, 1049 posts — Last Post 04/08/14, 08:22AM

Foreclosure Investing

General Foreclosure & Pre-Foreclosure Forums

1686 topics, 11281 posts — Last Post 04/15/14, 03:20AM

HUD, VA, and Tax Sales

414 topics, 3085 posts — Last Post 04/14/14, 06:29PM


1212 topics, 10563 posts — Last Post 04/15/14, 01:08PM

Short Sales

1533 topics, 13117 posts — Last Post 04/15/14, 07:10PM

Landlord & Tenant Forums

Landlord & Rental Property Questions

7183 topics, 70443 posts — Last Post 04/16/14, 12:00AM

Mobile Homes & Mobile Home Park Investing

636 topics, 5127 posts — Last Post 04/15/14, 09:59PM

Investor Basics

Starting Out

7670 topics, 60229 posts — Last Post 04/15/14, 11:55PM

Investor Psychology

430 topics, 6092 posts — Last Post 04/14/14, 06:53PM

General Real Estate Investing

4706 topics, 37120 posts — Last Post 04/15/14, 11:15PM

Real Estate Investor Marketing

1728 topics, 14068 posts — Last Post 04/15/14, 10:57PM

Commercial Real Estate

Commercial Real Estate Investing Forum

1409 topics, 8967 posts — Last Post 04/15/14, 08:35PM

Multi-Family and Apartment Investing

1100 topics, 9145 posts — Last Post 04/15/14, 10:32PM

The Business of Real Estate

Real Estate Technology and the Internet

Real Estate Technology, Social Media & Blogging

638 topics, 4883 posts — Last Post 04/15/14, 01:41PM

Business Basics

Goals, Business Plans & Entities

827 topics, 7526 posts — Last Post 04/15/14, 07:32PM

Real Estate Finance & Legal

Financial, Tax, and Legal

Tax, Legal Issues, Contracts, Self-Directed IRA

2778 topics, 19965 posts — Last Post 04/15/14, 10:02PM

Property Insurance

308 topics, 2036 posts — Last Post 04/14/14, 07:40AM

Personal Finance Discussion

327 topics, 2686 posts — Last Post 04/04/14, 02:51PM

Loans, Mortgages, Credit Lines

Private & Conventional Lending Discussion

2822 topics, 19655 posts — Last Post 04/15/14, 07:17PM

Creative Real Estate Financing

1206 topics, 8758 posts — Last Post 04/15/14, 02:21PM

Crowdfunding Real Estate

35 topics, 455 posts — Last Post 04/14/14, 02:14PM

Real Estate Professionals

Real Estate Professionals

Real Estate Agents

1204 topics, 7919 posts — Last Post 04/15/14, 09:27PM

Bankers, Lenders, and Mortgage Brokers

440 topics, 1917 posts — Last Post 04/15/14, 07:37AM


261 topics, 1656 posts — Last Post 04/15/14, 07:17PM

Local Real Estate

Local Real Estate

Local Real Estate Networking & Recommendations

1979 topics, 11548 posts — Last Post 04/15/14, 11:32PM

Americans & International Real Estate

161 topics, 566 posts — Last Post 04/14/14, 11:19AM

Foreigners Buying in the USA

62 topics, 409 posts — Last Post 04/10/14, 06:27AM

Canadian Real Estate

64 topics, 422 posts — Last Post 04/14/14, 05:41PM


Real Estate Marketplace

Real Estate Marketplace

14978 topics, 53844 posts — Last Post 04/16/14, 12:22AM

Real Estate Events and Happenings

162 topics, 2396 posts — Last Post 04/16/14, 12:21AM


Off Topic


2902 topics, 32394 posts — Last Post 04/15/14, 06:04PM

Housing News & Real Estate Market

913 topics, 8330 posts — Last Post 04/15/14, 10:21AM

BiggerPockets Real Estate Investing Summit

97 topics, 1751 posts — Last Post 04/10/14, 02:27PM

BiggerPockets Resources

Forums » Rehabbing and House Flipping » Cash out, appraisal, and tax assessed value.

Cash out, appraisal, and tax assessed value.

6 posts by 3 users


· St Paul, Minnesota

Hey everyone, got a few questions based on a property I just bought back in August. Basically, I got a steal of a deal. Brick home built in '41, furnace and water heater and AC all less than 2 years old, roof less than 8 years, brick recently tuck pointed etc. All mechanical in good condition. It is a 2/1 with a 1 car on a nice city lot in a desirable suburb outside of the Twin Cities, MN, just into Wi. It has a full staircase up to a full attic with large side dormer(for walk in closet or bathroom), and full poured basement.

I intend to finish the upstairs attic into the master suite (bathroom still up in the air as it will be a huge POW for the buyer, but will cost quite a bit to get it done up there) and finish the basement with a full large bathroom, laundry room, living/media room, and an office/non-legal bedroom with a full walk in closet. Right now it is already plumbed for a shower and toilet and they function, but will need to be moved. OK - so with that info...

After educating myself quite a bit on here, my game plan is to finish these things while the loan seasons, and cash-out refi this house to pull out some equity to purchase another property. I bought the house at 82k conv loan 5% down (78k financed), 30 years @ 4%, tax assessed value was at 160k back in the boom (just for simple reference) right now as a 2/1 I believe ARV to be about 115k, maybe a hair more. Finished as a 4/2 or 4/3 I hope for it to appraise for at a minimum of 130k (based on comps I am very hopeful for more). If i can get it appraised at 130-140k, my idea is going conventional @ 20% equity to lose the PMI to help offset the payment increase, and cashing out the difference. Any advice or input on this game plan?

Lastly, I am paying taxes on 160k still. On my first house, I called my city tax assessor when my taxes were bumped up in 2011, and I was able to get my tax assessed value lowered back to 2010 value. Upon further review, my tax value has been lowered over 20k, but the amount due has been the same since 2010, those sneaky bas.... The tax value is still 8k+ over what I actually bought it for. My question and idea is, call and ask to have my house assessed to have the value lowered to possibly lower my taxes, before I make the improvements. If I were to do this, would his hurt my future appraisal for my potential cash out refi?

Any advice and input is appreciated. Thanks!

SFR Investor · Wheat Ridge, Colorado

How did you get an investment loan with only 5% down? Do you actually have a lender that will go to 80% on the refi? That's higher than is common. 70-75% would be more common.

Are you getting permits on this new work? That's typically where assessors get their information about the property. They factor that into a new appraisal. There is usually a notice sent once a year about the valuation and the appeal process. Timing varies from state to state and county to county.

Do you have solid comps to support your estimated value? What about the bad comps? You cannot count on an appraiser using the best comps, you just hope they don't use the worst. Document all your work with pictures and receipts and give those to the appraiser. Actually be there to meet the appraiser and discuss the work you did to the house.

Aren't you going to have to upgrade the HVAC and electrical for all the new space?

Jon Holdman, Flying Phoenix LLC

· St Paul, Minnesota

@Jon Holdman ,

Thanks for the reply. It is not an investment loan. Owner Occupied, Conventional loan. I am currently living in the house, with a buddy renting the spare bedroom. My idea is to refi as an owner occupied loan, either FHA (I was reading up to 85% LTV? or Conventional at 20%LTV, to drop the PMI).

As far as permits, I have been told not to pull them (by uneducated or under the radar types) but after reading how it will affect appraisal, and how I could be made to demo the new contruction, I intend to pull permits and have it inspected properly. I cant afford to dump $20k into this place, then have to gut it. As an aspiring REI I welcome risk, but not that much risk :)

I do believe I have solid comps to support my numbers. However, the prices have jumped quite a bit with the shortage of foreclosures and short sales not needing rehab. SFH that were going for 120K are going for 130-140K in turn key condition. I have access to not only active MLS listings, but also the Solds, in the last year (focusing on last 3-6 months). Most of the houses on the MLS that are cheaper need work and are ugly. The other houses in my price range or slightly cheaper, need major updating, and any 4/2 4/3 with updating are listed higher. I think there is a great niche at the 140-160 range for a fully updated house, aimed at FTHB's. I feel very confident my house is worth at least 115-120K as it sits. I am in a very desirable historic downtown, of a historic logging community, great schools, next to parks, 3 minutes to interstate, 30 minutes from Minneapolis, etc. I bought here (twice - my houses are back to back) for a reason. :) The strategy is cash out, to buy another, but this property will be a BAH. The rental market is hot here. I believe I can get about $1000-1100 a month as it sits, and upwards of $1400-$1500 a month completed.

Great point on the HVAC and electrical. I definitely intend to update the electrical. Old fuse panel, with only one switch in the basement, and 5 lights on individual pull switch style lights, and only one light in the attic. Can lights and outlets galore is the idea, probably also a slim profile ceiling fan in attic. The furnace being of decent size, high efficiency, and only 1 year old, I am praying that it is large enough to handle adding the basement and attic. If not, that will definitely take another $2500 away from the bottom line. Thanks for the motivation to go home and figure out the CFM of the furnace and see if it will be able to handle all the new area. Basically the house is 1050 sq ft on the main floor, and I should have approximately 850 fin sq feet down stairs, and an approx 700 sq feet finished upstairs. As far as overall volume of air though in the attic, the half/knee walls will reduce size of attic and the upstairs attic is obviously a triangle shape, not a cube, so if i remember my 9th grade geometry, this is half the volume of air per floor sq footage.

· St Paul, Minnesota

Just to add- with the knee walls it will obviously not be a triangle, but you get my point, with the roof taking away some of the volume of the room, in comparison to a normal main floor or basement "cube shaped" room

Foreclosure Specialist · Miami, Florida

Another problem with selling renovated properties is that sometimes the property becomes overpriced. Unless the property was purchased at a very high discount, you typically will not recoup 100% of your investment dollar.

Remodeling Magazine states these facts: An attic bedroom returns 72.5%. A basement remodel is around 67%. A master suite addition will get you a whopping 59%.

Any seller needs to know the market value of the property "As Is", "After Renovation" and the cost of the renovation to see if there will be any money in the proposed renovation.

Simon Campbell,

· St Paul, Minnesota

Thank you and i agree completely. However, Heres my problem with those numbers. If I am doing most work myself, the cost of investment is much lower. I can only assume those returns are based on construction work done by contractors? Also, I believe the return to be much higher on a master suite or attic bedroom because my home right now is only a two bedroom one bath. Adding a master suite as well as living space in the basement is going to make this house much more desirable for a typical family. One of my major selling points as far as rental or when it comes to selling the house is the fact that I am in a very family-friendly neighborhood with churches schools,shopping, a beautiful river for recreation and the interstate all within a stones throw. I appreciate the motivation to further inspect my numbers and analyze what makes more sense, ether Investing more to create more living space or investing the minimal amount. Overall I feel like this house needs to at least be a 3/2 to make it desirable and greatly increase my renter and buyer base.

Sign up