Puzzled by the appraised value of the condos
Hi everyone,
I am still a newbie in real estate investing and have been looking at investing in Texas Tax Deeds more than anything else. I have a question that maybe some of you here have the answer to.
I recently acquired from the tax sale, 4 condos at once. They are located in Humble Texas. All 4 were part of the same Cause number so that's why I got 4 units at one go. I did my research before the auction and found that maybe I will attempt these properties. The auction bid started at $18k and I eventually won it at $28k. For 4 condo units. That is about $7k per unit. 2 of the units already have tenants in them. Add in about $3k renovation costs per unit will bring up to $10k per unit. I decided to bid for this one because of the very good rental yield it gives me. At $10k per apartment, I am able to rent each out at $600 per month. If you deduct 50% costs, I will yield $300 nett and the rents will more or less pay off the cost of the apartment in 3 years.
My question actually is, when I checked on zillow, the market value was listed at $60k - $70k per unit. But the tax records appraised it at only $10k+. Why is that so? The difference is so wide it puzzles me. And the neighborhood is quite good with good schools nearby and it's safe.
Also my most important question would be, is this a good deal from a cashflow perspective?
Thank you for any inputs!