Analyzing Deals in NC & SC

10 Replies

Hello BP,

My partner and I, are currently taking our first steps in real estate investments. We live in NYC but will be investing in both Charlotte, NC and Rock Hill, SC. I have family living in both areas who have helped me get familiar with the market. We've done our own research and are now analyzing deals to get a move on. To determine our numbers to analyze, we've used certain websites and my families input as well but they can only help so much. We overestimate our numbers to leave us some room to work with and not fall into unexpected surprises. I would like to get some feedback from those who are more familiar with the market in both states than we are. Attached are (2) reports of single family homes we analyze in NC and SC using the BRRR method. Can you guys please let me know if our numbers are way off and should be using different sources to get more accurate numbers? We would appreciate your help greatly.

Hey Cindy,

Congrats on your starting our real estate journey. I have been researching a lot of deals and this is pertaining to the SC market exclusively but taxes in SC unfortunately are significantly higher for investor owned versus owner occupied (4% vs. 6%) so I’m thinking the taxes paid per month are probably underestimated and this can significantly affect cash flow for a lot of deals in this area. Millage rates for SC are also higher in SC unfortunately as well. 

You can check millage rates in SC at the tax assessor website: https://www.yorkcountygov.com/150/Assessor

Hope this helps and good luck investing!

Jared Wonders

Cindy,
Happy to see a fellow New Yorker investing in NC.
I’ve been investing in Charlotte for the past 2 years and just recently I’m under contract w first property in Raleigh and my first off market deal in Charlotte.
I would be happy to share my contacts in Charlotte, they know how to work w New Yorkers like ourselves :)
Send me a PM, I couldn’t zoom in to see both properties. I’m viewing thru mobile phone, I will try later when home..

Raul

As Jared said, your property taxes on the Rock Hill property are WAY off.

Your property taxes on that property will be over $1k/year. 

Your valuation is top of the mark there.  You may get a $95ARV, I think 89 is much more realistic.

FWIW, just ran that house through my spreadsheet. My max offer would be $48K IF your rehab $15k number is right.

Thank you for taking the time to answer. @Jared Wonders  we have already started crunching numbers to make sure we start on this path the right way. We looked up the millage rate, we'll make sure to utilize it moving forward.

@Ron T.  We have heard the saying multiple times, "You make your money when you buy." Which has been our entire focus this time. We are curious to know how you arrive to the 48k figure, would you mind diving into a bit further via PM?

Your Taxable Value on this property is $ 71,500.

So here how it breaks down for your taxes in Rock Hill SC:

$71,500 x 6% = $4290 (6% is non-owner occupied taxable rate)

$4290 x  .4108 = $1762.33 per year  (.4108 is the current 2017 millage rate)

So your taxes are going to be $146.86 per month.

Here is a copy of current millage rates per county in my area.

After looking at your numbers I would think your rehab budget is low.

I have a lot of property in Rock Hill and you need to make sure you get a home inspection.  Almost every house I buy has some foundation issues due to the soil.  That could bust your deal right from the start if not caught right away.

You can PM me if you have any area specific questions.

Good Luck!

@Cindy Hurtado

You may not want to put the property addresses going forward. I am sure everyone on BP is a saint but someone may steal the deals from right under your nose.

I also think you are underestimating the closing costs.

Originally posted by @Basit Siddiqi :

@Cindy Hurtado

You may not want to put the property addresses going forward. I am sure everyone on BP is a saint but someone may steal the deals from right under your nose.

I also think you are underestimating the closing costs.

Actually one of the benefits to the area is very reasonable lawyer/title/close fees if you have the right attorneys.

Cash close on that property I could stay under $1k. But Ive closed dozens with my atny and I get a rate

@David Chwaszczewski Thank you for giving us a comprehensive breakdown. That's one of the things that we wanted when we first commented. To have someone go in more in depth and dissect the numbers along with us. Webinars and online research can only do so much. We were using the York county website to check how much the previous owner had paid in the taxes, but obviously some of these homeowners are getting taxed at 3% rather than 6%. We are currently making sure to have accurate numbers before putting offers on houses, in such hot markets, we don't want to be overpaying.

@Cindy Hurtado You can't base your estimate off of the tax history in SC. As @David Chwaszczewski said there's a big difference in mileage/rate for primary resident vs investors. The tax for the same house in Rock Hill will be $600 for primary resident, and $2000 for investor. Not only the taxable rate goes up from 4% to 6%, but the school taxes are higher for non-occupant. It's kind of crazy, but as long as you account for that in your estimate, you should be fine. Since inventory is pretty low here, I'm also looking into the Columbia, SC market. About an hour from Rock Hill, good rents, and a lot more inventory. Feel free to PM me if you have additional questions.

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