Do I buy a vacant duplex based on tax assessment?

3 Replies

You come up with your ARV, subtract out your costs, subtract your profit, and that is your purchase price. Now whether you want to value the ARV based on potential rent from 3 units, the previous rent from the duplex (2 units), comps in the area, tax assessment, etc that depends on how much competition there is for the house. Id be conservative in approach and try to come up with a number that is fair to both you and the seller.

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@Anthony Mannino

Tax assessment is not a good indication of what the fair market value of a property is.

Figure out the fair market value by looking at comps of similar properties recently sold in the area.

I would also assume that when you purchase the house that you purchase it assuming that it will always stay a 2-unit.
If you can convert it to a 3-unit, great. 
Just check if you need to have the property zoned as a 3-unit.