Rental Property Investor · Bay Area · Member since 2014 · 49 posts · 5 votes
Hi All,
I bought a MFH for $360k last year in Chicago. I put $80k into it for a complete rehab. It's been fully rented and is generating very nice 20% CoC return (down + rehab cost). Prices have gone up quite a lot since I bought it. My agent ran a comp and he is confident I can get $550k for my rehabbed MFH.
I'm thinking to do a refinance to get the cash out up to 75% LTV for the next property purchase or I can also sell stocks to get the cash for the next property. What would happen to property tax after the refinance? Would it go up significantly because it will be based on the new appraised value? Chicago property tax has gone up this year and will continue to increase in the next 5 years.
Based on the calculation from the cook county assessor website, my new property tax at 550k value will be $14k compared to $8k I'm currently paying.
I bought a MFH for $360k last year in Chicago. I put $80k into it for a complete rehab. It's been fully rented and is generating very nice 20% CoC return (down + rehab cost). Prices have gone up quite a lot since I bought it. My agent ran a comp and he is confident I can get $550k for my rehabbed MFH.
I'm thinking to do a refinance to get the cash out up to 75% LTV for the next property purchase or I can also sell stocks to get the cash for the next property. What would happen to property tax after the refinance? Would it go up significantly because it will be based on the new appraised value? Chicago property tax has gone up this year and will continue to increase in the next 5 years.
Based on the calculation from the cook county assessor website, my new property tax at 550k value will be $14k compared to $8k I'm currently paying.
I've a couple multi-families that are similar situations to yours in Chicago and yes I would refi. Cook county does their own appraisal so your banks appraisal shouldn't impact the county's at all.
Also, protest your property taxes. I've saved thousands by taking a few hours of researching this thoroughly and following through. I have a 3 unit probably similar to yours worth about 450K and my taxes are $4500.
Rental Property Investor · Arlington Heights, IL · Member since 2017 · 243 posts · 108 votes
9y
If I were in your shoes, I'd do the refi approach so I could use the difference on a new property. Although if you sell it you could probably do a 1031 exchange into a new property.
I agree with @Wayne Brooks that your taxes won't go up just from a refinance. They won't see the appraisal as he stated. Have done several cash outs myself as well as for my clients and my taxes haven't gone up from the cash outs, nor have my clients ever stated that as well. With a MFR you can pull out 70% of the current appraised value on the property for an investment. It is a great idea to use that cash to repeat the process.
I bought a MFH for $360k last year in Chicago. I put $80k into it for a complete rehab. It's been fully rented and is generating very nice 20% CoC return (down + rehab cost). Prices have gone up quite a lot since I bought it. My agent ran a comp and he is confident I can get $550k for my rehabbed MFH.
I'm thinking to do a refinance to get the cash out up to 75% LTV for the next property purchase or I can also sell stocks to get the cash for the next property. What would happen to property tax after the refinance? Would it go up significantly because it will be based on the new appraised value? Chicago property tax has gone up this year and will continue to increase in the next 5 years.
Based on the calculation from the cook county assessor website, my new property tax at 550k value will be $14k compared to $8k I'm currently paying.
I've a couple multi-families that are similar situations to yours in Chicago and yes I would refi. Cook county does their own appraisal so your banks appraisal shouldn't impact the county's at all.
Also, protest your property taxes. I've saved thousands by taking a few hours of researching this thoroughly and following through. I have a 3 unit probably similar to yours worth about 450K and my taxes are $4500.