City assessed value/taxes went up 2x is it legal?

[Alexander Kleyman]

Hey BP just just got a 2021 Notice of Assessment for a property I closed on in Nov 2020. The city states that taxable value went from $23126 to $40100. Taxes are now increased by an additional $1585 a year ($132/month) which pretty much doubles the taxes. Needless to say this cuts a good chunk of profit I was counting on. Property is still profitable just not as much obviously.

FYI Previous owner lived there for 26 years & purchase price was $83k. I am shocked that a city can just literally double the assesses value and taxes due in one swoop, is this legal? How do you prevent this kind of a surprise in the future when shopping for investment properties, I mean you run your numbers do all the math and then its all invalid after the purchase? 

[Tom Degroodt]

This has happened to us.  It has happened when the old owner has had the property for a long time.  Another time it happens is when we buy an a deep discount, rehab the home and do a refinance.  Both purchasing and refinancing can trigger the taxing authority to reassess the property.  When we buy, I usually will try to find comps that were sold 18-36 months before and look at what their taxes did.  I run my numbers based on their taxes, not the taxes of the home I am buying.  That way the first year you get the 1st month without a mortgage payment and the 1st year lower taxes as bonuses.  The second year you will be close to the numbers you ran.  It doesn't always work out exactly, but its better than getting hit in the face with double taxes.