Go Protest your Taxes!

[Adam Bartling]

I am underwriting an apartment in Galveston County. No wonder the sellers want to sell. Their property is a C class, Highest 2/2 rent $1150 mo. Last renovation done to the properties exterior, my guess 10-12 years ago. It is worn down. 

This property DOES NOT CASH FLOW with the Assessed Tax Value!!!

You Can NOT get a loan at $4,008,960 (tax value) and Make A Profit!!!

Current Cash Flow Value on this property is $821,250   Galveston CAD increased tax values over 45% in 2 years

You greedy folks who jacked up prices just because Interest rates were down.... you and those who bought are the problem. 

Oh and the officials who think we the people are here to provide our hard earned money so your departments can have nice new everything and make 6 figures when you do Not Generate a Profit!

Sorry for my long rant, but I have two parties that I can not help. Tax protest was either not done or it failed. I am just trying to help people.

Protest your Taxes - rant over

[John Underwood]

Quote from @Adam Bartling:

I am underwriting an apartment in Galveston County. No wonder the sellers want to sell. Their property is a C class, Highest 2/2 rent $1150 mo. Last renovation done to the properties exterior, my guess 10-12 years ago. It is worn down. 

This property DOES NOT CASH FLOW with the Assessed Tax Value!!!

You Can NOT get a loan at $4,008,960 (tax value) and Make A Profit!!!

Current Cash Flow Value on this property is $821,250   Galveston CAD increased tax values over 45% in 2 years

You greedy folks who jacked up prices just because Interest rates were down.... you and those who bought are the problem. 

Oh and the officials who think we the people are here to provide our hard earned money so your departments can have nice new everything and make 6 figures when you do Not Generate a Profit!

Sorry for my long rant, but I have two parties that I can not help. Tax protest was either not done or it failed. I am just trying to help people.

Protest your Taxes - rant over

 I contest my taxes all the time on new properties. I always get a reduction.

It's as simple as sending a letter and explaining why these should be lower with evidence attached.

[Chris Seveney]

@Adam Bartling

I am not opposed to fighting taxes but also realize a county doesn’t care if your property will cash flow as if it’s commercial they may look at cap rates and cap rates exclude financing.

[Matthew Paul]

But the same officals want affordable housing , but when they raise the taxes , the landlord must raise the rents .   So who is responsible for the lack of affordable housing ?

[Jeremy H.]

Quote from @John Underwood:

I contest my taxes all the time on new properties. I always get a reduction.

It's as simple as sending a letter and explaining why these should be lower with evidence attached.

 What evidence/reasoning do you provide?

[John Underwood]

Quote from @Jeremy H.:

Quote from @John Underwood:

I contest my taxes all the time on new properties. I always get a reduction.

It's as simple as sending a letter and explaining why these should be lower with evidence attached.

 What evidence/reasoning do you provide?

 condition of my property, comps, Similar properties tax rate etc.

[Victor S.]

in before "but there is no state income tax in TX!" lol 

[Wayne C.]

@Victor S. can you explain wtf your comment means??

[Mike Dymski]

Searching for over-assessed properties, particularly in TX, should be an acquisition strategy.

Incidentally, jurisdictions across the country are going to be assessing upwards based on stale information while cap rates are rising and property values are declining.

[Joe S.]

I even had one taxing authority argue with me at a protest hearing. The argument was they were using when I listed a house that did not sell as justification to raise the tax value. I thought it unique that if you bought a property off market they would say it’s not an arms length transaction and disregard the sales price. But if you try to sell a house and it don’t sell then they change their mind and say that it should be Worth what it was listed for.. They definitely played by two different sets of rules.

[Kristi K.]

Quote from @Adam Bartling:

Protest your Taxes - rant over

I agree you should protest. I protested 6 properties in central Texas this year and they knocked off $247,000. All I did was send in 3 comps for each property that took my realtor 10 minutes to pull from the recently sold data.

[Greg H.]

Purchase the property for less than the appraised value and protest next spring and the problem is solve.  The issue has nothing to do with any "greedy folks who jacked up prices".  

Additionally, the Tax appraisal value in Texas is no indicator of market value, list price nor sales price

[Joe S.]

Quote from @Greg H.:

Purchase the property for less than the appraised value and protest next spring and the problem is solve.  The issue has nothing to do with any "greedy folks who jacked up prices".  

Additionally, the Tax appraisal value in Texas is no indicator of market value, list price nor sales price

 If you buy the property off market the taxing authorities still try to deny your purchase price. It is not a arms length transaction and their opinion. That has been my experience.

[Adam Bartling]

Quote from @Chris Seveney:

@Adam Bartling

I am not opposed to fighting taxes but also realize a county doesn’t care if your property will cash flow as if it’s commercial they may look at cap rates and cap rates exclude financing.

 The county has lost their mind, I left out a 0 it is a 450% increase. I have a tax protest company looking into it.  But the current owner did not protest, and if they did... I am really concerned on how many properties were sold for 450% of their value in their area within the same asset class.    Either way the deal is dead until the county comes back to reality. 

[Greg H.]

Quote from @Adam Bartling:

Quote from @Chris Seveney:

@Adam Bartling

I am not opposed to fighting taxes but also realize a county doesn’t care if your property will cash flow as if it’s commercial they may look at cap rates and cap rates exclude financing.

 The county has lost their mind, I left out a 0 it is a 450% increase. I have a tax protest company looking into it.  But the current owner did not protest, and if they did... I am really concerned on how many properties were sold for 450% of their value in their area within the same asset class.    Either way the deal is dead until the county comes back to reality. 

 So what would the purchase price be vs the appraised value?  2022 Taxes are already out and the seller would be responsible thru the date of closing.  2023 Appraisals will come out in the Spring and will need to be protested by May 15th(Most cases).  If/when the protest is successful, that value would be used for all of 2023 so in reality the buyer would not be affected at all by the current value.  FYI- The Appraisal District is not going to to just "come to reality".  It will take someone to be proactive.  A 450% would be unusual but I assume there is an answer in the details as not all counties reassess yearly.  I have also had AD drop my value 200+% when I could justify 

[Ryan Seib]

The tax reassessment should be out soon or you may be able to underwrite it for a contract that closes with the new tax assessment as the contingency.

I believe most state laws rely on recent arms length sale prices for the assessment. That is the case in Wisconsin. So, the county would be forced in some cases to use the purchase price. Of course, that does not control mill rate and so on.

I hope this gets resolved for everyone. Happy holidays.